`[Federal Register Volume 63, Number 134 (Tuesday, July 14, 1998)]
[Rules and Regulations]
[Pages 38036-38060]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18621]



[[Page 38035]]

_______________________________________________________________________

Part III





Department of the Treasury





_______________________________________________________________________



Fiscal Service



_______________________________________________________________________



31 CFR Parts 317, 321, 330, 359, and 360 Offering and Governing 
Regulations For United States Savings Bonds, Series I; Issuing and 
Paying Agents; and Payment; Final Rule

  Federal Register / Vol. 63, No. 134 /  Tuesday, July 14, 1998 / Rules 
and Regulations  

[[Page 38036]]



DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Parts 317, 321, 330, 359, and 360


Offering and Governing Regulations for United States Savings 
Bonds, Series I; Issuing and Paying Agents; and Payment Under Special 
Endorsement

AGENCY: Bureau of the Public Debt, Fiscal Service, Department of the 
Treasury.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Department of the Treasury (``Department'' or 
``Treasury'') is publishing in final form new regulations providing an 
offering circular for United States Series I Savings Bonds, new 
regulations governing United States Series I Savings Bonds, and 
conforming amendments to existing regulations governing issuing and 
paying agents. The regulations provide for the public offering of new 
Treasury inflation-indexed savings bonds (``Series I'') by the 
Department. The regulations also set forth the provisions governing 
transactions in inflation-indexed savings bonds. In addition, this rule 
makes certain technical clarifications and conforming changes.

EFFECTIVE DATE: September 1, 1998.

ADDRESSES: Copies of this final rule are available for downloading from 
the Bureau of the Public Debt at the following World Wide Web address: 
<http://www.savingsbonds.gov> or may be obtained from the Bureau of the 
Public Debt, Division of Staff Services, 200 3rd St., Parkersburg, WV 
26106-1328.

FOR FURTHER INFORMATION CONTACT: Wallace L. Earnest, Director, Division 
of Staff Services, at (304)480-6319 or by e-mail at 
<[email protected]>; Edward C. Gronseth, Deputy Chief Counsel, at 
(304)480-5192 or by e-mail at <[email protected]>; or Dean A. 
Adams, Assistant Chief Counsel, Office of the Chief Counsel, at 
(304)480-5192 or by e-mail at <[email protected]>.

SUPPLEMENTARY INFORMATION:

I. Background

    31 CFR Part 359, referred to as the offering circular, sets out the 
terms and conditions for the sale and issuance of United States Savings 
Bonds, Series I, by the Department of the Treasury to the public. 31 
CFR Part 360, referred to as the governing regulations, sets out the 
terms and conditions governing transactions in United States Savings 
Bonds, Series I. Together, the offering circular and governing 
regulations represent comprehensive and exclusive statements of those 
terms and conditions.
    The regulations in 31 CFR part 317 (also referred to as Department 
of the Treasury Circular, Public Debt Series No. 4-67, Second Revision, 
as amended), 31 CFR part 321 (also referred to as Department of the 
Treasury Circular No. 750, Fourth Revision, as amended), and 31 CFR 
Part 330 (also referred to as Department of the Treasury Circular No. 
888, Fifth Revision, as amended), are being amended to incorporate 
changes relating to Series I.
    The Department has decided to offer a new type of savings bond, 
referred to as an inflation-indexed or Series I savings bond, whose 
rate will be adjusted for inflation as described below. The Department 
believes the issuance of these new inflation-indexed savings bonds will 
reduce borrowing costs to the Treasury over the long term, will broaden 
the types of debt instruments available to investors, and will make 
available to all investors a security whose value is tied generally to 
changes in inflation. This new series of savings bonds contains terms 
relating to the use of the U.S. City Average All Items Consumer Price 
Index for All Urban Consumers (``CPI-U''), published by the Bureau of 
Labor Statistics (``BLS'') to measure inflation, that potential 
investors should review closely.

    Because these savings bonds contain terms different from savings 
bonds previously issued by the Department, the interested investor 
is urged to read ``Investment Considerations'' set forth in the 
``Summary of Significant Features'', Paragraph (24), and Sec. 359.3.

II. Summary of Significant Features

    Offering Regulations (31 CFR part 359), Governing Regulations (31 
CFR part 360)

(1) Availability (Sec. 359.0)

    The public will be able to purchase Series I bonds over-the-counter 
at many financial institutions and through employers who choose to 
offer Series I bonds through payroll savings plans.

(2) Denominations (Sec. 359.2(b))

    Series I bonds will be offered at par value in denominations of 
$50, $75, $100, $200, $500, $1,000, $5,000, and $10,000. Issuance of 
Series I bonds at par value is different from Series EE bonds, which 
are issued at a 50% discount to par value (or face amount). Thus, it 
will cost $50 to purchase a $50 Series I bond, and $25 for a $50 Series 
EE bond.

(3) Purchase Limitation (Sec. 359.5)

    The amount of Series I bonds which may be purchased in the name of 
any one person, in any one year, is limited to $30,000 (par value) per 
social security account number.

(4) Transferability (Secs. 360.15, 360.16)

    Series I bonds will not be transferable, negotiable, or available 
for pledge or use as collateral, except as specifically provided in the 
regulations.

(5) Exchange

    Series I bonds will not be available for exchange for other series 
of savings bonds.

(6) Rate Announcements (Sec. 359.2(e)(1)(i))

    Rates applicable to Series I bonds will be set forth in rate 
announcements published each May and November. If the regularly 
scheduled date for the announcement (for example, May 1) is a day when 
the Treasury is not open for business, then the announcement will be 
made on the next business day; however, the effective date of the rates 
will remain the first day of the month of the announcement.

(7) Fixed Rate of Return (Sec. 359.2(e)(1)(i),(ii))

    The Secretary of the Treasury shall determine fixed rates of return 
for Series I savings bonds. The Department's rate announcements 
effective each May 1 and November 1 will reflect the Secretary's 
determination of the fixed rate of return for bonds purchased during 
the six-month period beginning with the effective date of the 
announcement. For example, a fixed rate reflected in the May 1, 1999, 
announcement will apply to any Series I bond purchased in the period 
May through October 1999. The fixed rate of return applicable at the 
time a Series I bond is issued will apply to such bond throughout its 
30-year life. Accordingly, the Department's rate announcements each May 
and November will not affect the fixed rates established for bonds 
previously issued.

(8) Semiannual Inflation Rate (Sec. 359.2(e)(1)(iii))

    Each May and November, Treasury will announce a variable semiannual 
inflation rate for inflation-indexed savings bonds. The index used to 
determine this rate will be the non-seasonally adjusted U.S. City 
Average All Items Consumer Price Index for All

[[Page 38037]]

Urban Consumers (``CPI-U'') published by the Bureau of Labor Statistics 
(``BLS'') of the U.S. Department of Labor. (Sec. 359.3 of the Series I 
offering regulations sets forth index contingencies for determining an 
inflation component if the CPI-U is not available.) More specifically, 
the rate will reflect the percentage change in the CPI-U during the 
six-month period ending each March and September. For example, the 
semiannual inflation rate to be announced May 1, 1999, will reflect the 
change in the index over the period October 1998 through March 1999. 
The semiannual inflation rate will be reflected in a Series I bond's 
value beginning on that bond's next semiannual interest period 
following the announcement. For a complete discussion of this lag 
feature, see paragraph (24)(b) below.
    The rate of change over the six-month period will be expressed as a 
percentage, rounded to the nearest one hundredth of one percent. More 
specifically, using the above example, the semiannual inflation rate 
will equal the CPI-U value for the most recent March less the value for 
the preceding September with that difference then being divided by the 
CPI-U value for the preceding September and the result being multiplied 
by 100 to convert the rate to a percentage. The resulting rate will be 
rounded to the nearest one-hundredth of one percent. The semiannual 
inflation rate to be effective with the November announcement, 
reflecting the change in the CPI-U for the six-month period ending with 
the immediately preceding September, will be similarly determined. In 
deflationary conditions, the semiannual inflation rate may be negative 
to such an extent that it offsets or exceeds the fixed rate of return; 
however, the redemption value of a Series I bond for any particular 
month of payment will not be less than the value for the preceding 
payment month.

(9) Composite Rate (Sec. 359.2(e)(1)(v))

    Series I bonds will accrue earnings based on both a fixed rate of 
return and the semiannual inflation rate. A single annual rate will be 
constructed to reflect the combined effects of the fixed rate of return 
and the semiannual inflation rate. The following formula demonstrates 
how the composite rate will be determined.
    The fixed rate of return, FR, and the semiannual inflation rate, 
SIR, will be divided by 100 to remove the percentage format and then 
combined into a composite annual rate, CR, in accordance with the 
following formula:

CR = {SIR + (FR  2) + [SIR  x  (FR  2)]}  x  2

    The resulting annual rate will be converted to a percentage and 
rounded to the nearest one hundredth of one percent. The composite 
rates will be announced by Treasury each May and November, and will be 
derived from the semiannual inflation rate announced on the same date 
and the fixed rates of return applicable to Series I savings bonds.

(10) Deflation (Sec. 359.2(e)(1)(iii))

    Negative as well as positive changes in the CPI-U will be used to 
calculate composite rates. In the event of deflation, the negative 
change in the CPI-U will reduce the composite rate. If deflation is 
such that it more than fully offsets the fixed rate of return and 
produces a negative composite rate, the composite rate will not be 
reduced below zero, i.e., the redemption value of the bond will remain 
constant through the period and become the base for calculating 
earnings that may apply during the subsequent period.

(11) Base Denomination (Sec. 359.2(e)(1)(vi))

    All value calculations are performed on a hypothetical denomination 
of $25 having a value at the beginning of the first semiannual rate 
period equal to the issue price of $25. The hypothetical denomination 
of $25 is used because all Series I bond denominations are divisible by 
$25. Redemption values for bonds of greater denominations are in direct 
proportion according to the ratio of denominations. For example, if the 
value of a hypothetical $25 denomination is $41.20--i.e., $25.00 issue 
price plus $16.20 accrued interest--on the same redemption date, the 
value of a $50 bond bearing the same issue date is $41.20  x  (50/25) 
or $82.40.

(12) Issue Date (Sec. 359.2(e)(1)(vii))

    The issue date of a Series I bond is the first day of the month in 
which payment of the issue price is received by an authorized issuing 
agent. Thus, if an authorized issuing agent receives the issue price on 
the 20th of a month, the issue date is the first of the month.

(13) Redemption Value (Sec. 359.2(e)(1)(viii))

    The redemption value of a bond is that amount that will be paid 
when the bond is redeemed.

(14) Accrual Date (Sec. 359.2(e)(1)(ix))

    Earnings on a Series I bond, if any, accrue on the first day of 
each month. The redemption value of a bond does not change between 
accrual dates.

(15) Semiannual Rate Periods (Sec. 359.2(e)(1)(x))

    Semiannual rate periods are the six-month periods beginning on the 
date of issue and on each semiannual anniversary of the date of issue 
to maturity.

(16) Maturity (Sec. 359.2 (c),(e)(1)(xi))

    Series I bonds have a maturity period of 30 years, consisting of an 
original maturity period of 20 years and an automatic extension period 
of 10 years. The bonds have an interest paying life of 30 years after 
date of issue and cease to increase in value as of that date.

(17) Interest Rates and Monthly Accruals (Sec. 359.2(e)(2),(4))

    Series I composite rates apply to earnings during the first 
semiannual rate period beginning on or after the effective date of the 
rate. Interest, at the composite rate from the beginning of the initial 
semiannual rate period, accrues according to the formula specified in 
Sec. 359.2(e)(4)(ii). The following table shows, for any given month of 
issue with composite rates announced each May and November, the months 
making up the semiannual rate period during which interest is earned at 
the composite rate specified in the announcement.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Announcement date of                                     Announcement date of 
                                         Semiannual rate period (1)       composite rate that       Semiannual rate period (2)      composite rate that 
          Month of issuance                        begins                 applies during rate                 begins                applies during rate 
                                                                               period (1)                                               period (2)      
--------------------------------------------------------------------------------------------------------------------------------------------------------
January.............................  January 1.......................  November 1 (announced 2  July 1.........................  May 1 (announced 2    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
February............................  February 1......................  November 1 (announced 3  August 1.......................  May 1 (announced 3    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             

[[Page 38038]]

                                                                                                                                                        
March...............................  March 1.........................  November 1 (announced 4  September 1....................  May 1 (announced 4    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
April...............................  April 1.........................  November 1 (announced 5  October 1......................  May 1 (announced 5    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
May.................................  May 1...........................  May 1..................  November 1.....................  November 1.           
June................................  June 1..........................  May 1 (announced 1       December 1.....................  November 1 (announced 
                                                                         month prior to                                            1 month prior to     
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
July................................  July 1..........................  May 1 (announced 2       January 1......................  November 1 (announced 
                                                                         months prior to                                           2 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
August..............................  August 1........................  May 1 (announced 3       February 1.....................  November 1 (announced 
                                                                         months prior to                                           3 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
September...........................  September 1.....................  May 1 (announced 4       March 1........................  November 1 (announced 
                                                                         months prior to                                           4 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
October.............................  October 1.......................  May 1 (announced 5       April 1........................  November 1 (announced 
                                                                         months prior to                                           5 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
November............................  November 1......................  November 1.............  May 1..........................  May 1.                
December............................  December 1......................  November 1 (announced 1  June 1.........................  May 1 (announced 1    
                                                                         month prior to                                            month prior to       
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Notwithstanding any consideration of interest penalty for early redemption, interest earned during each month of a semiannual rate period accrues
  according to the formula specified in Sec.  359.2(e)(4)(ii). Also, if the regularly scheduled date for a composite rate announcement is a day that    
  Treasury is not open for business, the announcement will be made on the next business day; however, the effective date of the rate will be the first  
  day of the month of the announcement.                                                                                                                 

    See also the discussion of inflation lag in paragraph (24)(b) 
below.

(18) Redemption (Sec. 359.2(d))

    A Series I bond may be redeemed beginning six months after its 
issue date or at any time thereafter. The Secretary of the Treasury may 
not call a Series I bond for redemption prior to an original maturity 
period of 20 years and an automatic extension period of 10 years, for a 
total period of 30 years from its issue date.

(19) Interest Penalty (Sec. 359.2(e)(3))

    A Series I bond may be redeemed beginning six months after 
issuance, although a bond redeemed less than five years from the date 
of issue will be subject to a three-month interest penalty. If a Series 
I bond is redeemed less than five years following the date of issue, 
the overall earning period from the date of issue to the date of 
redemption will be reduced by three months. For example, if a bond 
issued on January 1, 1999, is redeemed nine months later on October 1, 
1999, the redemption value will be determined by applying the value 
calculation procedures described in Sec. 359.2(e)(4) and the Series I 
bond composite rate for that bond as if the redemption date were three 
months earlier (July 1, 1999). The redemption value of a bond subject 
to the three-month interest penalty will not be reduced below the issue 
price. This penalty does not apply to bonds redeemed five years or more 
after the date of issue. For a discussion of interest penalty, see 
paragraph (24)(d) below.

(20) Redemption Value Calculations (Sec. 359.2(e)(4))

    Interest on a bond accrues and becomes part of the redemption value 
which is paid when the bond is surrendered for payment. The redemption 
value of a bond for the accrual date (the first day of each month) is 
determined in accordance with Sec. 359.2(e)(4). Redemption value 
calculations will provide for monthly increases in bond values, with 
all values calculated using the formula in Sec. 359.2(e)(4), and will 
take into account a three-month loss of earnings for bonds held less 
than five years from date of issue.

(21) The Secretary's Determination (Sec. 359.2(e)(5))

    The determination by the Secretary of the Treasury, or the 
Secretary's designee, of fixed rates of return, semiannual inflation 
rates, composite rates, and savings bond redemption values shall be 
final and conclusive.

(22) Tables of Redemption Values (Sec. 359.2(e)(6))

    Tables of redemption values are made available in various formats 
and media, including on the Internet, by the Bureau of the Public Debt, 
Parkersburg, West Virginia 26106-1328. Treasury reserves the right to 
cease making the tables of redemption values available in any of these 
formats or media. Redemption values published in such tables reflect 
the three-month interest penalty applied to bonds redeemed prior to 
five years from the date of issue.

(23) Taxation (Secs. 359.9, 359.10)

    The increase in value, represented by the difference between the 
face or par amount of a Series I bond and the redemption value received 
for it, is interest. Thus, earnings produced by the composite rate 
(which consists of both the fixed rate and the semiannual inflation 
rate) are treated as interest. Interest earned on Series I bonds is 
exempt from State and local income taxes. Series I bond interest will 
be included on Federal tax returns in the same way as Series EE bonds. 
In general, owners may defer reporting the increment for Federal income 
tax purposes until: (i) they redeem the bonds, (ii) the bonds cease 
earning interest after 30 years, or (iii) are otherwise disposed of, 
whichever is

[[Page 38039]]

earlier. However, an owner may elect to accrue the increment each year 
it is earned. Thus, if an investor takes no action, the gain is 
deferred until the first of the three events described above occurs. 
Only if an investor affirmatively acts by making such an election will 
the increase in value be includable in income annually. The current 
special tax benefits available for education savings with EE bonds 
purchased after 1989 will apply to Series I bonds. If a taxpayer 
qualifies under current rules and the bonds are redeemed to pay for 
post-secondary tuition and fees, he or she can exclude all or part of 
the interest (the difference between the redemption value and face 
value) earned on Series I bonds from income for that tax year. 
Authoritative information about the Education Savings Bond Program can 
be found in Internal Revenue Service Publication 17, ``Your Federal 
Income Tax'', and Publication 550, ``Investment Income and Expenses.''

(24) Investment Considerations (Secs. 359.2, 359.3)

(a) Index Contingencies (Sec. 359.3(a))
    This section clarifies the Treasury's course of action if the CPI 
is: discontinued, or, in the judgment of the Secretary, either 
fundamentally altered in a manner materially adverse to the interests 
of an investor in the savings bond or altered by legislation or 
Executive Order in a manner materially adverse to the interests of an 
investor in the savings bond.
    A change to the CPI would be considered fundamental if it affected 
the character of the CPI. Technical changes made by the BLS to the CPI 
to improve its accuracy as a measure of the cost of living would not be 
considered fundamental changes. Technical changes include, but are not 
limited to: (1) The specific items (e.g., apples or major appliances) 
to be priced for the index; (2) the way individual price quotations are 
aggregated to construct component price indices for these items 
(aggregation of item sub-strata); (3) the method for combining these 
component price indices to obtain the comprehensive, all-items CPI 
(aggregation of item strata); and (4) the procedures for incorporating 
new goods into the index and making adjustments for quality changes in 
existing goods.
    Technical changes to the CPI previously made or announced by BLS 
include introducing probability sampling to select the precise items 
for which prices are collected and the stores in which collection takes 
place, and changing the way in which price movements of major 
components, such as shelter costs for homeowners in the early 1980s and 
medical care costs beginning in 1997, are measured.
    The Advisory Commission to Study the Consumer Price Index (the 
Boskin Commission) made a number of recommendations to improve the 
calculation of changes in the cost of living. Some of these 
recommendations were directed to BLS and were designed to improve the 
calculation of the monthly CPI. These recommendations, if and to the 
extent implemented by BLS, would constitute technical changes rather 
than fundamental changes.
    The Boskin Commission also recommended construction of an annual 
measure of the cost of living as a supplement to the monthly CPI. 
Development and use of such a supplement, by itself, would not change 
the monthly CPI itself. While the Boskin Commission did not suggest 
that such a measure replace the CPI, a decision by BLS to replace, 
rather than supplement, the current monthly CPI with an annual measure 
of consumer prices, would constitute a fundamental change.
    In addition, if the Secretary determines that the CPI is altered by 
legislation or Executive Order in a manner that is materially adverse 
to the interests of an investor in the savings bond, the Secretary 
would propose an alternative index.
    If the CPI for a particular month is not reported by the last day 
of the following month, the last CPI that has been reported (including 
any revision of a previously reported CPI number) will be used to 
calculate CPI numbers for months for which the CPI has not been 
reported for such day.
(b) Inflation Lag (Sec. 359.3(b))
    The inflation rate component of investor earnings will be 
determined twice each year. This rate will be the percentage change in 
the CPI-U for the six months ending each March and September. The rate 
will be included in the composite rate that is announced each May and 
November. Each composite rate will be effective for the entirety of all 
semiannual rate periods that begin while the rate is in effect. Thus, 
notwithstanding any interest penalty, an inflation rate may affect 
interest accruals from 3 to 13 months from the date that the CPI-U is 
measured.
    For example, the inflation rate determined from the CPI-U for the 
six-month period from October 1, 2003, through March 31, 2004, will be 
included in the composite rate announced on May 1, 2004. For a bond 
purchased in May 1999, this rate will go into effect immediately with 
the new semiannual rate period for this bond beginning on May 1, 2004. 
Series I bonds issued in May begin new semiannual rate periods in the 
months of May and November. In this example, the inflation rate will 
have its earliest impact in June 2004, when interest from May accrues, 
three months after the end of the six-month CPI-U period that ended 
March 31, 2004.
    As another example, the May 1, 2004, rate will apply similarly to a 
bond purchased in October 1999. Series I bonds issued in October begin 
new semiannual rate periods in the months of April and October. Thus, 
for this bond, the May 1, 2004, composite rate (which includes the 
fixed rate applicable when the bond was purchased in October 1999 and 
the inflation rate announced on May 1, 2004) will not go into effect 
until a new semiannual rate period starts on October 1, 2004. This 
rate, therefore, will determine the inflation-indexed portion of each 
interest accrual from November 2004 through April 2005. In this 
example, the inflation rate will have its latest impact in April 2005, 
13 months after the end of the six-month CPI-U period that ended March 
31, 2004.
(c) Liquidity (Sec. 359.2(d), (e)(3))
    A Series I bond may not be redeemed until six months after its 
issue date. However, a bond redeemed less than five years from the date 
of issue will be subject to a three-month interest penalty.
(d) Early Redemption Penalty (Sec. 359.2(e)(3))
    If a Series I bond is redeemed less than five years following the 
date of issue, the overall earning period from the date of issue will 
be reduced by three months. For example, if a bond issued January 1, 
1999, is redeemed nine months later on October 1, 1999, the redemption 
value will be determined by applying the value calculation procedures 
described in Sec. 359.2(e)(4) and the Series I bond composite rate for 
that bond as if the redemption date were three months earlier (July 1, 
1999). The redemption value of a bond subject to the three-month 
interest penalty shall not be reduced below the issue price. This 
penalty does not apply to bonds redeemed five years or more after the 
date of issue.

III. Section-by-Section Summary

    This final rule provides for the sale and issuance of, and the 
governing of transactions in, Series I savings bonds. This rule also 
amends Parts 317, 321

[[Page 38040]]

and 330, relating to issuing and paying agents of savings bonds, to 
incorporate changes to accommodate the processing of Series I savings 
bonds. The regulations also contain changes designed to reduce 
operating costs and provide for increased efficiency, without any 
reduction in the level of service to bondowners and financial 
institutions serving as financial agents.

Part 359, Offering of United States Savings Bonds, Series I

    (1) Section 359.0 provides that the offering for sale of Series I 
savings bonds is effective September 1, 1998.
    (2) Section 359.1 cross-references the regulations governing 
transactions in Series I savings bonds.
    (3) Section 359.2 describes Series I savings bonds in terms of 
denominations, issue prices, maturity period, redemption features, 
determination of the composite rate, and redemption value calculations.
    (4) Section 359.3 describes investment considerations, to include 
CPI index contingencies, the inflation lag factor, liquidity, and the 
early redemption penalty.
    (5) Section 359.4 sets out general provisions regarding the 
registration and issuance of Series I savings bonds.
    (6) Section 359.5 sets the limitation on annual purchases at 
$30,000 issue price per person determined by social security account 
number.
    (7) Section 359.6 provides for the purchase of Series I savings 
bonds through payroll plans, over-the-counter/mail, bond-a-month plans, 
and various employee plans.
    (8) Section 359.7 describes mail deliveries of Series I savings 
bonds.
    (9) Section 359.8 sets out general provisions for the payment or 
redemption of Series I savings bonds by financial institutions and 
Federal Reserve Banks and Branches.
    (10) Section 359.9 sets out various provisions regarding the 
taxation of Series I savings bonds.
    (11) Section 359.10 briefly describes the education savings bond 
program feature of Series I savings bonds.
    (12) Section 359.11 authorizes the Commissioner of the Public Debt 
to convert definitive Series I savings bonds to book-entry.
    (13) Section 359.12 authorizes the Commissioner of the Public Debt 
to refuse to issue Series I savings bonds under certain circumstances.
    (14) Section 359.13 authorizes the Commissioner of the Public Debt 
to waive or modify any provision of these regulations if certain 
conditions are met.
    (15) Section 359.14 sets out the Federal Reserve Banks and Branches 
that provide savings bond services in the various geographic areas.
    (16) Section 359.15 describes the Secretary of the Treasury's 
authority to supplement or amend this offering at any time.

Part 360, Regulations Governing United States Savings Bonds, Series I

    (17) Section 360.0 provides that these regulations govern 
transactions in Series I savings bonds.
    (18) Section 360.1 sets out the Federal Reserve Banks and Branches 
that process savings bond transactions in the various geographic areas.
    (19) Section 360.2 contains the specific definitions of terms used 
in the governing regulations.
    (20) Section 360.5 provides that the registration of a Series I 
savings bond is conclusive of ownership. It also sets out registration 
forms and gift bond inscriptions.
    (21) Section 360.6 describes the authorized forms of registration, 
including single ownership, coownership, and beneficiary.
    (22) Section 360.7 provides that the issuance of Series I savings 
bonds in a chain letter or pyramid scheme is prohibited.
    (23) Section 360.10 specifies the annual purchase limitations for 
individuals and employee plans.
    (24) Section 360.11 sets out the computation of purchase amounts by 
taxpayer identifying number.
    (25) Section 360.12 provides for the adjustment of excess 
purchases.
    (26) Section 360.13 sets out conditions of eligibility for various 
employee plans.
    (27) Section 360.15 provides that Series I savings bonds are non-
transferable and are only payable to the owners named on the bonds.
    (28) Section 360.16 provides that Series I savings bonds may not be 
pledged or used as security for the performance of an obligation.
    (29) Section 360.20 sets out restrictions on the recognition of 
judicial proceedings pertaining to Series I savings bonds.
    (30) Section 360.21 sets out the procedures for making payment to 
judgment creditors.
    (31) Section 360.22 provides for payment or reissue pursuant to 
divorce.
    (32) Section 360.23 sets out the evidence necessary to establish 
the validity of judicial proceedings.
    (33) Section 360.24 provides for payment procedures pursuant to 
judicial or administrative forfeiture.
    (34) Section 360.25 provides for the recognition of claims for 
lost, stolen, or destroyed bonds.
    (35) Section 360.26 sets out the claims procedures after an 
investor has received a bond.
    (36) Section 360.27 sets out the claims procedures when an investor 
has not received a bond.
    (37) Section 360.28 provides for the recovery of bonds. A bond for 
which relief has been granted is the property of the United States.
    (38) Section 360.29 provides for the handling of claims filed 10 
years after payment of the bond or 10 years after maturity.
    (39) Section 360.35 sets out general provisions for the payment of 
Series I savings bonds.
    (40) Section 360.36 provides for payment during an owner's 
lifetime.
    (41) Section 360.37 provides for payment to either coowner.
    (42) Section 360.38 provides for payment to the registered owner of 
a bond on which a beneficiary is named.
    (43) Section 360.39 sets out general procedures for the surrender 
of Series I savings bonds for payment.
    (44) Section 360.40 sets out special provisions for the payment of 
Series I savings bonds.
    (45) Section 360.41 provides for partial redemption of a Series I 
savings bond.
    (46) Section 360.42 provides that notice should be given to the 
paying agency if the payment remittance is not received or has been 
lost.
    (47) Section 360.43 establishes the date upon which the rights of 
the parties are fixed for the purpose of payment.
    (48) Section 360.44 provides for the withdrawal of a request for 
payment by an owner, coowner, or legal representative.
    (49) Section 360.45 sets out the conditions for reissue.
    (50) Section 360.46 establishes the date upon which the rights of 
the parties are fixed for the purpose of reissue.
    (51) Section 360.47 provides for reissue under limited 
circumstances, to include divorce.
    (52) Section 360.48 provides that reissue may not be made solely to 
change denominations or eliminate the United States Treasury as 
coowner.
    (53) Section 360.49 provides that reissue may be made to correct an 
error in registration.
    (54) Section 360.50 provides that reissue may be made pursuant to a 
legal change of name.
    (55) Section 360.51 provides that, under certain specified 
circumstances, a request for reissue of a coowner bond must be made by 
both coowners, while a bond registered in beneficiary form may be 
reissued at the request of the owner without the consent of the 
beneficiary.

[[Page 38041]]

    (56) Section 360.55 sets out who is authorized to certify a request 
for payment, reissue or a signature to a Public Debt form.
    (57) Section 360.56 provides general instructions and sets out the 
liability of certifying officers.
    (58) Section 360.57 explains when a certifying officer may not 
certify requests.
    (59) Section 360.58 specifies when forms are to be certified.
    (60) Section 360.60 provides for payment to the representative of 
the estate of an owner who is a minor or incompetent.
    (61) Section 360.61 provides for payment to the representative 
after the ward has died.
    (62) Section 360.62 provides for payment to a minor.
    (63) Section 360.63 provides for payment to a parent or other 
person on behalf of a minor.
    (64) Section 360.64 provides for payment to or the reinvestment of 
bonds by a voluntary guardian on behalf of an owner incapable of making 
the request, and for whom no legal representative has been appointed.
    (65) Section 360.65 specifies the conditions under which a bond 
owned by a minor or person under legal disability may be reissued.
    (66) Section 360.70 sets out the rules governing entitlement for 
single owner, coowner, and beneficiary bonds, upon the death of one or 
both of the registrants, without the bond having been surrendered for 
payment or reissue.
    (67) Section 360.71 provides for the payment or reissue of bonds to 
the legal representative of a deceased bondowner's estate.
    (68) Section 360.72 sets out procedures for the payment or reissue 
of bonds that are the property of a decedent's estate.
    (69) Section 360.75 provides for payment or reissue during the 
existence of a fiduciary estate.
    (70) Section 360.76 provides for payment or reissue after 
termination of a fiduciary estate.
    (71) Section 360.90 authorizes the Commissioner of the Public Debt 
to waive or modify any provision of the regulations if certain 
conditions are met.
    (72) Section 360.91 provides that the Commissioner of the Public 
Debt may require additional evidence or a bond of indemnity as he deems 
necessary for the protection of the United States.
    (73) Section 360.92 sets out the Secretary of the Treasury's 
authority to supplement or amend the Series I savings bond regulations 
at any time.

IV. Procedural Requirements

    This final rule does not meet the criteria for a ``significant 
regulatory action'' pursuant to Executive Order 12866. Therefore, the 
regulatory review procedures contained therein do not apply.
    This final rule relates to matters of public contract and 
procedures for U.S. securities. The notice and public procedures 
requirements of the Administrative Procedure Act are inapplicable, 
pursuant to 5 U.S.C. 553(a)(2).
    Since no notice of proposed rulemaking is required, the provisions 
of the Regulatory Flexibility Act (5 U.S.C. 601, et seq.) do not apply.
    There is no new collection of information contained in this final 
rule, and, therefore, the Paperwork Reduction Act (44 U.S.C. 3507) does 
not apply.

List of Subjects

31 CFR Parts 317, 321, 330

    Banks, banking, Bonds.

31 CFR Parts 359 and 360

    Bonds, Federal Reserve System, Government securities, Securities.

    Dated: July 8, 1998.
Donald V. Hammond,
Acting Fiscal Assistant Secretary.

    For the reasons set forth in the preamble, 31 CFR Chapter II, 
Subchapter B, is amended as follows:

PART 317--REGULATIONS GOVERNING AGENCIES FOR ISSUE OF UNITED STATES 
SAVINGS BONDS

    1. The authority citation for part 317 is revised to read as 
follows:

    Authority: 2 U.S.C. 901; 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 
3105.

    2. Section 317.0 is revised to read as follows:


Sec. 317.0  Purpose and effective date.

    The regulations in this part govern the manner in which an 
organization may qualify and act as an agent for the sale and issue of 
Series EE and Series I United States Savings Bonds.
    3. In Sec. 317.1, paragraph (d) is revised to read as follows:


Sec. 317.1  Definitions

* * * * *
    (d) Offering circular refers to Department of the Treasury 
Circular, Public Debt Series No. 1-80, current revision, for Series EE 
savings bonds, and to Department of the Treasury Circular, Public Debt 
Series No. 1-98 for Series I bonds.
* * * * *


Sec. 317.8  [Amended]

    4. Subpart A, Paragraph 1 of the Appendix to Sec. 317.8 is revised 
to read as follows:

Appendix to Sec. 317.8--Remittance of Sales Proceeds and 
Registration Records, Department of the Treasury Circular, Public 
Debt Series No. 4-67, Second Revision (31 CFR Part 317) Fiscal 
Service, Bureau of the Public Debt

Subpart A--General Information

    1. Purpose. This appendix is issued for the guidance of 
organizations qualified as issuing agents of Series EE and I United 
States Savings Bonds under the provisions of Department of the 
Treasury Circular, Public Debt Series No. 4-67, current revision. 
Its purpose is to supplement the provisions of Sec. 317.8 of the 
Circular relating to the remittance of savings bond sales proceeds 
and registration records, including the interest charge to be 
collected for late remittances.
* * * * *
    5. Subpart D, Paragraph 1. of the Appendix to Sec. 317.8 is revised 
to read as follows:
* * * * *

Subpart D--Interest on Late Remittances

    1. Rate of Interest. Interest will be assessed for each day's 
delay in the remittance of sales proceeds, based on the actual date 
of remittance. The rate of interest to be used will be the current 
value of funds to the Department of the Treasury, as set forth each 
quarter in the Treasury Financial Manual. The rate applied will be 
that in effect during the entire period in which the remittance is 
late. The interest assessment will be collected by the designated 
Federal Reserve Bank.
* * * * *
    6. Section 317.9 is amended by removing paragraph (b)(2), by 
redesignating paragraph (b)(1) as paragraph (b), and by revising the 
entry for the Federal Reserve Bank of Minneapolis in the table in newly 
designated paragraph (b) to read as follows:


Sec. 317.9  Role of the Federal Reserve Banks.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                   Reserve districts    Geographic area 
        Servicing office                served              served      
------------------------------------------------------------------------
                                                                        
                  *        *        *        *        *                 
Federal Reserve Bank of           Minneapolis,        IA, IL (northern  
 Minneapolis, 90 Hennepin          Chicago.            half), IN        
 Avenue, Minneapolis MN 55401.                         (northern half), 
                                                       MI, MN, MT, ND,  
                                                       SD, WI.          
                                                                        

[[Page 38042]]

                                                                        
                  *        *        *        *        *                 
------------------------------------------------------------------------

PART 321--PAYMENTS BY BANKS AND OTHER FINANCIAL INSTITUTIONS OF 
UNITED STATES SAVINGS BONDS AND UNITED STATES SAVINGS NOTES 
(FREEDOM SHARES)

    7. The authority citation for part 321 is revised to read as 
follows:

    Authority: 2 U.S.C. 901; 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 
3105, 3126.

    8. In Sec. 321.0, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 321.0  Purpose

* * * * *
    (a) United States Savings Bonds of Series A, B, C, D, E, EE, and I, 
and United States Savings Notes (Freedom Shares), presented for cash 
payment; and
    (b) Eligible Series E and EE savings bonds and savings notes 
presented for redemption in exchange for Series HH savings bonds under 
the provisions of Department of the Treasury Circular, Public Debt 
Series No. 2-80 (31 CFR part 352).
    9. In Sec. 321.1, paragraph (o) is revised to read as follows:


Sec. 321.1  Definitions.

* * * * *
    (o) Security means a United States Savings Bond of Series A, B, C, 
D, E, EE, or I and/or a United States Savings Note (Freedom Share).
* * * * *
    10. In Sec. 321.3, paragraph (c) is revised to read as follows:


Sec. 321.3  Procedure for qualifying and serving as paying agent.

* * * * *
    (c) Announcement of authority. Upon receipt of a certificate of 
qualification from a Federal Reserve Bank referred to in Sec. 321.25, a 
financial institution may announce or advertise its authority to redeem 
eligible securities for cash and to process eligible Series E and EE 
savings bonds and savings notes presented for redemption in exchange 
for Series HH savings bonds under the provisions of Department of the 
Treasury Circular, Public Debt Series No. 2-80 (31 CFR part 352).
* * * * *
    11. Section 321.6 is revised to read as follows:


Sec. 321.6  General.

    Securities are issued only in registered form (subject to 31 CFR 
359.11), are not transferable, may not be hypothecated or used as 
collateral for a loan, and, except as otherwise specifically provided 
in the governing regulations and this part, are payable to the owner or 
coowner named on the security. The regulations governing Series EE and 
HH bonds are contained in Department of the Treasury Circular, Public 
Debt Series No. 3-80, current revision (31 CFR part 353); those 
governing Series I bonds are contained in Department of the Treasury 
Circular, Public Debt Series No. 2-98 (31 CFR part 360); and, those 
governing all other series of U.S. savings securities are contained in 
Department of the Treasury Circular No. 530, current revision (31 CFR 
part 315).
    12. In Sec. 321.7, paragraphs (a) and (g) are revised to read as 
follows:


Sec. 321.7  Authorized cash payments.

    (a) General. Subject to the terms and conditions appearing on the 
securities, the governing regulations, and the provisions of this part, 
and any instructions issued in connection therewith, an agent may make 
payment of savings bonds of Series A, B, C, D, E, EE, and I, and 
savings notes, presented for cash redemption. Except as provided in 
paragraphs (b) through (d), and (f) of this section, the securities 
must be presented by an individual whose name is inscribed on the 
securities as owner or coowner, and who is known to the agent, or who 
can establish his or her identity in accordance with Treasury 
instructions and guidelines (See Sec. 321.11(b)).
* * * * *
    (g) Interest reporting. A paying agent is required to report 
interest in the amount of $10 or more, paid as part of the redemption 
value of securities, to the payee and to the Internal Revenue Service, 
in accordance with 26 CFR 1.6049-4. (See Item 26 of the appendix to 
this part for information concerning the education feature of Series EE 
savings bonds issued on or after January 1, 1990, and of Series I 
savings bonds.)
    13. In Sec. 321.9, paragraph (a) is revised to read as follows:


Sec. 321.9  Specific limitations on payment authority.

* * * * *
    (a) If it is a Series EE bond or a Series I bond presented for 
payment prior to six months from its issue date.
* * * * *
    14. Section 321.12 is revised to read as follows:


Sec. 321.12  Redemption value of securities.

    The redemption value of each savings security is determined by the 
terms of its offering and the length of time it has been outstanding. 
The Bureau of the Public Debt determines redemption values for Series 
A-E bonds, eligible Series EE and I bonds, and savings notes, that 
should be used in redeeming savings securities.
    15. Section 321.25 is amended by removing paragraph (b)(2), by 
redesignating paragraph (b)(1) as paragraph (b), and by revising the 
entry for the Federal Reserve Bank of Minneapolis in the table in newly 
designated paragraph (b) to read as follows:


Sec. 321.25  Role of Federal Reserve Banks.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                   Reserve districts    Geographic area 
        Servicing office                served              served      
------------------------------------------------------------------------
                                                                        
              *        *        *        *        *                     
Federal Reserve Bank of           Minneapolis,        IA, IL (northern  
 Minneapolis, 90 Hennepin          Chicago.            half), IN        
 Avenue, Minneapolis MN 55401.                         (northern half), 
                                                       MI, MN, MT, ND,  
                                                       SD, WI.          
                                                                        
              *        *        *        *        *                     
------------------------------------------------------------------------

    16. The appendix heading and paragraphs 2(a) and 2(b) of Subpart A 
of the appendix to part 321 are revised to read as follows:

Appendix to Part 321--Appendix to Department of the Treasury 
Circular No. 750, Fourth Revision

* * * * *

Subpart A--General Information

* * * * *
    2. * * *
    (a) Offering circulars. Department of the Treasury Circulars, 
Public Debt Series Nos. 1-80 (31 CFR part 351, Series EE bonds), 2-80 
(31 CFR part 352, Series HH bonds), 1-98 (31 CFR part 359, Series I 
bonds), and 3-67 (31 CFR part 342, savings notes), and Department of 
the Treasury Circulars Nos. 653 (31 CFR part 316, Series E bonds) and 
905 (31 CFR part 339, Series H bonds).
    (b) Regulations. Department of the Treasury Circular, Public Debt 
Series No. 3-80 (Series EE and HH bonds); Department of the Treasury 
Circular, Public Debt Series 2-98 (Series I bonds); Department of the 
Treasury Circulars

[[Page 38043]]

Nos. 530 (all other series of savings securities) and 888 (special 
endorsements); Federal Tax Regulations (26 CFR 1.6049); Federal Claims 
Collection Standards (4 CFR parts 101-105); Regulation J, Collection of 
Checks and Other Items and Wire Transfers of Funds (12 CFR part 210); 
and operating circulars issued by Federal Reserve Banks relating to the 
collection of cash items and Federal payments by ACH.
* * * * *
    17. Subpart C, paragraph 7(a) and 10(a), of the appendix to part 
321 are revised to read as follows:
* * * * *

Subpart C--Scope of Authority

    7. * * *
    (a) General. [Sec. 321.7(a)] The general authority of paying agents 
to redeem savings securities for cash extends to Series A, B, C, D, E, 
EE, and I bonds and savings notes presented by the owner, coowner, 
surviving beneficiary, parent on behalf of a minor, legal 
representative designated in the registrations of savings securities 
presented, or legal representative of the last deceased registrant's 
estate. The presenter must sign the requests for payment and establish 
his or her identity and, in the case of a beneficiary, parent or legal 
representative of the last deceased registrant's estate, entitlement to 
request payment.
* * * * *
    10. * * *
    (a) Requirements for redeeming securities. [Sec. 321.10(a)] A 
paying agent shall redeem eligible savings securities during its 
regular business hours for a presenter who establishes his or her 
identity as the owner or coowner of the securities, in accordance 
with this part and this appendix. While a paying agent is not 
required to redeem eligible Series E and EE savings bonds and 
savings notes in exchange for Series HH bonds for any presenter, or 
Series E, EE, or I bonds or savings notes for cash upon the request 
of a surviving beneficiary or legal representative, it is encouraged 
to do so, provided the presenter can establish his/her identity and 
provide acceptable evidence to accordance with this part and this 
appendix (See Sec. 321.7 (d) and (f)). An agent is not required to 
redeem savings securities during Saturday and evening hours if it is 
open during such periods primarily as a service for its depositors.
* * * * *
    18. Subpart D, paragraphs 13(a), 13 (b), 13(d), 14(d), 15 and 17(b) 
of the appendix to part 321 are revised to read as follows:
* * * * *

Subpart D--Payment and Transmittal of Securities

* * * * *
    13. * * *
    (a) Redemption value tables. [Sec. 321.12] The Bureau of the 
Public Debt distributes redemption values in various formats and as 
part of programs for personal computers, for: (1) Series E bonds, 
(2) Series EE bonds, (3) Series I bonds, and (4) savings notes. 
Additional tables or information may be requested from the 
appropriate Federal Reserve Bank referred to in Sec. 321.25.
    (b) Use of tables. [Sec. 321.12] Care should be exercised to 
correctly determine the current redemption value of the security 
presented for the month in which it is redeemed. Incorrect payments 
can lead to costly and time-consuming adjustments for the agent, 
Department of the Treasury, and the appropriate Federal Reserve Bank 
referred to in Sec. 321.25.
* * * * *
    (d) Redemption-exchange. [Sec. 321.12] The redemption values of 
eligible Series E and EE savings bonds and savings notes presented 
for exchange (Series I savings bonds are not eligible for exchange) 
for Series HH bonds shall be those payable in the month the agent 
accepts a correctly completed and signed exchange subscription, 
Public Debt Form 3253. The total redemption value of securities 
presented for exchange in any one transaction must be at least $500. 
If the redemption value is $500 or an even multiple thereof, Series 
HH bonds must be requested in that exact amount. If the redemption 
value exceeds $500, but is not an even multiple of that amount, the 
presenter may add cash to increase the amount of the subscription to 
the next higher $500 multiple, or reduce the amount of the 
subscription to the next lower $500 multiple. The maximum amount 
which may be added to or refunded in an exchange transaction is 
$499.99. For example, if the total redemption value of the 
securities is $4,253.33, the presenter may request no less than 
$4,000 and no more than $4,500 in Series HH bonds. In the first 
instance, the agent will pay the presenter $253.33; in the second, 
it will collect $246.67 when it accepts the exchange subscription.
    14. * * *
    (d) Redemption-exchange. [Sec. 321.13] Eligible Series E and EE 
savings bonds and savings notes presented for redemption-exchange 
shall be stamped ``PAID'' in the same manner as securities redeemed 
for cash, but only when all elements of the transaction have been 
completed, including receipt of any additional cash. The exact date 
of redemption shall also be recorded on the exchange subscription to 
enable the appropriate Federal Reserve Bank referred to in 
Sec. 321.25 to establish the proper issue date for the Series HH 
bonds. An officer or other authorized employee of the agent shall 
also sign the exchange subscription, in his or her official 
capacity, and furnish other requested information that identifies 
the paying agent.
* * * * *
    15. Transmittal of securities to Federal Reserve Bank. 
[Sec. 321.14] An agent shall transmit and receive settlement for 
redeemed securities via EZ CLEAR, i.e., the Check Department of a 
Federal Reserve Bank or Branch or the Regional Check Processing 
Center. Redeemed securities may be transmitted in separately sorted 
or mixed cash letters to the Check Department of a Federal Reserve 
Bank or Branch, or to a Regional Check Processing Center, either 
directly, or via a parent office or correspondent institution. An 
agent shall transmit redeemed securities under cover of the 
appropriate transmittal document. Eligible Series E and EE savings 
bonds and savings notes redeemed in exchange for Series HH bonds 
must be transmitted for settlement via EZ CLEAR at the same time as 
the exchange application (Public Debt Form 3253) and any additional 
cash needed to complete the transaction are forwarded to the Fiscal 
Agency Department of the servicing Federal Reserve Bank referred to 
in Sec. 321.25. Eligible Series E and EE savings bonds and savings 
notes redeemed on exchange may be commingled with cash redemptions 
in mixed or separately sorted cash letters.
* * * * *
    17. * * *
    (b) Composition of cash letters. [Sec. 321.14] Series A, B, C, 
D, E, EE, and I bonds and savings notes redeemed for cash or 
eligible Series E and EE bonds and savings notes redeemed on 
exchange may be commingled in mixed cash letters containing 
commercial checks and other items or separately sorted cash letters 
containing only redeemed securities. Each cash letter shall also 
contain a listing prepared in accordance with the Federal Reserve 
Bank's instructions.
* * * * *
    19. Subpart F, paragraph 23(e), of the Appendix to part 321 is 
revised to read as follows:
* * * * *

Subpart F--Forwarding Items

    23. * * *
    (e) Partial redemption. [Secs. 321.9(l) and 321.22] Partial 
redemption of a security other than a $25 Series E bond or savings 
note, a $50 Series EE or I bond, or a $500 Series H or HH bond may 
be made by the appropriate Federal Reserve Bank referred to in 
Sec. 321.25. The amount paid must be equal to the redemption value 
of one or more authorized denominations on the date of the 
transaction. If a security is received by an agent for partial 
redemption, the words ``to the extent of $ (face amount) and reissue 
of the remainder'' should be added to the first sentence of the 
request for payment. The request should then be completed in the 
regular manner and the signature of the presenter certified or 
guaranteed. The security shall be forwarded to the Fiscal Agency 
Department of a Federal Reserve Bank.
* * * * *
    20. Subpart G, paragraph 26(a), of the Appendix to part 321 is 
revised to read as follows:
* * * * *

Subpart G--Miscellaneous Provisions

* * * * *
    26. * * *
    (a) Section 6009 of the Technical Corrections and Miscellaneous 
Revenue Act of 1988, Public Law 100-647 (see 26 U.S.C. 135), permits 
taxpayers to exclude all, or a portion, of the interest earned on 
Series EE savings bonds bearing issue dates on or after

[[Page 38044]]

January 1, 1990, and on Series I savings bonds from their income 
under certain conditions. This legislation did not create new 
savings bond redemption and interest reporting requirements for 
savings bond paying agents. However, if a bond owner indicates that 
he or she intends to seek the special tax treatment offered under 
this program, the paying agent is encouraged to provide assistance 
by:
    (1) Suggesting that he or she read IRS Form 8815 (particularly, 
the instructions on the form) as well as relevant portions of IRS 
Publication 17, ``Your Federal Income Tax ``, and Publication 550, 
``Investment Income and Expenses,'' for detailed information; and
    (2) Suggesting that the presenter make a record of eligible 
bonds redeemed either by using IRS Optional Form 8818, or otherwise.
* * * * *

PART 330--REGULATIONS GOVERNING PAYMENT UNDER SPECIAL ENDORSEMENT 
OF UNITED STATES SAVINGS BONDS AND UNITED STATES SAVINGS NOTES 
(FREEDOM SHARES)

    21. The authority citation for part 330 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; 31 U.S.C. 3105.

    22. In Sec. 330.1, paragraph (f) is revised to read as follows:


Sec. 330.1  Definition of terms.

* * * * *
    (f) Savings bond(s) or bond(s) means a United States Savings Bond 
of Series A, B, C, D, E, EE, or I.
* * * * *
    23. In Sec. 330.5, paragraph (a) is revised to read as follows:


Sec. 330.5  Evidence of owner's or beneficiary's authorization to affix 
special endorsement.

    (a) Form of authorization. The Treasury does not prescribe the form 
or type of instructions an agent must obtain from each owner, co-owner 
or beneficiary in order to use the special endorsement procedure. In 
the case of eligible Series E and EE savings bonds and savings notes 
presented for a redemption-exchange, the owner, coowner or beneficiary 
authorized to request the exchange (as specified in Circular No. 750, 
Sec. 321.8(b)), must sign the exchange subscription even though the 
eligible Series E and EE savings bonds and savings notes are specially 
endorsed.
* * * * *
    24. In Sec. 330.6, paragraph (a) is revised to read as follows:
    (a) General authority. A qualified agent is authorized to affix the 
special endorsement to:
    (1) Savings bonds of Series A, B, C, D, E, EE, and I and savings 
notes to be redeemed for cash; and
    (2) Eligible savings bonds of Series E and EE and savings notes to 
be redeemed in exchange for Series HH bonds under the provisions of 
Circular No. 2-80 (31 CFR part 352).
* * * * *
    25. Section 330.7 is revised to read as follows:


Sec. 330.7  Payment or redemption-exchange by agent.

    Specially endorsed securities may be paid in cash or, if they are 
eligible Series E and EE savings bonds or savings notes, redeemed in 
exchange for Series HH bonds pursuant to the authority and subject, in 
all other respects, to the provisions of Circular No. 750, current 
revision (31 CFR part 321), its appendix, and any other instructions 
issued under its authority. Each specially endorsed bond or note paid 
by an agent must have the agent's payment stamp imprinted on its face 
and show the date and amount paid. Securities so paid should be 
combined with other securities paid under that Circular and presented 
for settlement through EZ CLEAR. Securities redeemed by an agent in an 
exchange must be presented for settlement through EZ CLEAR separately 
from, but at the same times as, an exchange subscription and any 
remittance are forwarded to the Fiscal Agency Department of the 
appropriate Federal Reserve Bank.
    26. Section 330.8 is revised to read as follows:


Sec. 330.8  Payment or redemption-exchange by Federal Reserve Bank.

    Specially endorsed securities which an agent is not authorized to 
redeem for cash or on exchange should be forwarded to the Fiscal Agency 
Department of the designated Federal Reserve Bank. The transmittals 
must be accompanied by appropriate instructions governing the 
transaction and the disposition of the redemption proceeds or new 
bonds, as the case may be. The securities must be kept separate from 
others the agent has paid and must be submitted in accordance with 
instructions issued by the Bank.
    27. In Sec. 330.9, paragraph (b)(2) is removed, paragraph (b)(1) is 
redesignated as paragraph (b) and the table in newly designated 
paragraph (b) is amended by revising the entry for the Federal Reserve 
Bank of Minneapolis to read as follows:


Sec. 330.9  Fiscal agents.

* * * * *
    (b) * * *

------------------------------------------------------------------------
                                   Reserve districts    Geographic area 
        Servicing office                served              served      
------------------------------------------------------------------------
                                                                        
                  *        *        *        *        *                 
Federal Reserve Bank of           Minneapolis,        IA, IL (northern  
 Minneapolis, 90 Hennepin          Chicago.            half), IN        
 Avenue, Minneapolis MN 55401.                         (northern half), 
                                                       MI, MN, MT, ND,  
                                                       SD, WI.          
                                                                        
                  *        *        *        *        *                 
------------------------------------------------------------------------

    28. Section 330.10 is revised to read as follows:


Sec. 330.10  Modifications of other circulars.

    The provisions of this part shall be considered as amending and 
supplementing: Department of the Treasury Circulars Nos. 530, 653, and 
750 (31 CFR parts 315, 316, and 321, respectively), and Department of 
the Treasury Circulars, Public Debt Series Nos. 1-80, 2-80, 3-80, 3-67, 
1-98, and 2-98 (31 CFR parts 351, 352, 353, 342, 359, and 360 
respectively), and any revisions thereof or amendments or supplements 
thereto, and those Circulars are hereby modified to the extent 
necessary to accord with the provisions of this part.
    29. Part 359 is added to read as follows:

PART 359--OFFERING OF UNITED STATES SAVINGS BONDS, SERIES I

Sec.
359.0  Offering of bonds.
359.1  Governing regulations.
359.2  Description of bonds.
359.3  Investment considerations.
359.4  Registration and issue.
359.5  Limitation on purchases.
359.6  Purchase of bonds.
359.7  Delivery of bonds.
359.8  Payment or redemption.
359.9  Taxation.
359.10  Education savings bond program.
359.11  Reservation as to book-entry bonds.
359.12  Reservation as to issue of bonds.
359.13  Waiver.
359.14  Fiscal agents.
359.15  Reservation as to terms of offer.

    Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 3105.


Sec. 359.0  Offering of bonds.

    The Secretary of the Treasury offers for sale to the people of the 
United States, United States Savings Bonds of Series I, hereinafter 
referred to as Series I bonds or bonds. This offer, effective September 
1, 1998, will continue until terminated by the Secretary of the 
Treasury.

[[Page 38045]]

Sec. 359.1  Governing regulations.

    Series I bonds are subject to the regulations of the Department of 
the Treasury, now or hereafter prescribed, governing United States 
Savings Bonds of Series I, contained in Department of the Treasury 
Circular, Public Debt Series No. 2-98 (31 CFR part 360), hereinafter 
referred to as Circular No. 2-98. Treasury expressly disclaims the 
effect of, and does not warranty the correctness of, any 
representations or warranties regarding Series I bonds, wherever made, 
that in any way conflict with the terms and conditions of Series I 
bonds, as set out in these regulations and other applicable law. The 
regulations in 31 CFR part 370 apply to transactions for the purchase 
of United States Savings Bonds issued through the Bureau of the Public 
Debt. The regulations in 31 CFR part 370 do not apply to transactions 
for the purchase of bonds through issuing agents generally, unless and 
to the extent otherwise directed by the Commissioner of the Bureau of 
the Public Debt or the Commissioner's designee.


Sec. 359.2  Description of bonds.

    (a) General. Series I bonds are issued only in registered form 
(subject to Sec. 359.11) and are non-transferable. The bonds may be 
either in book-entry or definitive form.
    (b) Denominations and prices. Series I bonds are issued at par 
(face amount). The denominations and purchase prices are as follows:

------------------------------------------------------------------------
                                                               Purchase 
                        Denomination                            price   
------------------------------------------------------------------------
$ 50.......................................................       $50.00
75.........................................................        75.00
100........................................................       100.00
200........................................................       200.00
500........................................................       500.00
1,000......................................................     1,000.00
5,000......................................................     5,000.00
10,000.....................................................    10,000.00
------------------------------------------------------------------------

    (c) Term--maturity period. The issue date of a Series I bond is the 
first day of the month in which the issue price is received by an 
authorized issuing agent. Series I bonds have a maturity period of 30 
years, consisting of an original maturity period of 20 years and an 
automatic extension period of 10 years.
    (d) Redemption. A Series I bond may be redeemed beginning six 
months after its issue date or at any time thereafter. The Secretary of 
the Treasury may not call a Series I bond for redemption prior to an 
original maturity period of 20 years and an automatic extension period 
of 10 years, for a total period of 30 years from its issue date.
    (e) Composite rates and redemption values. (1) The following 
definitions apply for determining the composite rates and redemption 
values:
    (i) Rate announcements. Rates applicable to Series I bonds will be 
furnished in rate announcements published each May 1 and November 1. If 
the regularly scheduled date for the announcement (for example, May 1) 
is a day when the Treasury is not open for business, then the 
announcement is made on the next business day; however, the effective 
date of the rates remains the first day of the month of the 
announcement.
    (ii) Fixed rate of return. Each May and November the Secretary 
shall establish the fixed rate of return for Series I bonds issue-dated 
during the six-month period beginning on such date. Such fixed rate of 
return will be applicable for the life of the bond.
    (iii) Semiannual inflation rate. Each May and November, Treasury 
will announce a variable semiannual inflation rate for Series I bonds. 
The index used to determine this rate will be the non-seasonally 
adjusted U.S. City Average All Items Consumer Price Index for All Urban 
Consumers (``CPI-U'') published by the Bureau of Labor Statistics 
(``BLS'') of the U.S. Department of Labor. The semiannual inflation 
rate to be effective with the May announcement will reflect the rate of 
change in the CPI-U for the six-month period ending with the 
immediately preceding March 31. The rate of change over the six-month 
period will be expressed as a percentage, rounded to the nearest one 
hundredth of one percent. More specifically, the semiannual inflation 
rate will reflect the CPI-U value for the most recent March less the 
value for the preceding September, that difference will then be divided 
by the CPI-U value for the preceding September, and the result will be 
multiplied by 100 to convert the rate to a percentage. The resulting 
rate will be rounded to the nearest one-hundredth of one percent. The 
semiannual inflation rate to be effective with the November 
announcement, reflecting the change in the CPI-U for the six-month 
period ending with the immediately preceding September, will be 
similarly determined. In certain deflationary conditions, the 
semiannual inflation rate may be negative to such an extent that it 
will offset the fixed rate of return. However, the redemption value of 
a Series I bond for any particular month will not be less than the 
value for the preceding month. (See Sec. 359.3(b) for a discussion of 
the lag between when inflation is measured and when it is reflected in 
the value of a bond.)
    (iv) Index contingencies. If a previously reported CPI-U is 
revised, Treasury will continue to use the previously reported CPI-U in 
calculating redemption values. If the CPI-U is rebased to a different 
year, Treasury will continue to use the CPI-U based on the base 
reference period in effect when the security was first issued, as long 
as that CPI continues to be published. If, while an inflation-indexed 
savings bond is outstanding, the applicable CPI-U is: discontinued, in 
the judgment of the Secretary, fundamentally altered in a manner 
materially adverse to the interests of an investor in the security, or 
in the judgment of the Secretary, altered by legislation or Executive 
Order in a manner materially adverse to the interests of an investor in 
the security, Treasury, after consulting with the Bureau of Labor 
Statistics (``BLS''), or any successor agency, will substitute an 
appropriate alternative index. Treasury will then notify the public of 
the substitute index and how it will be applied. Determinations of the 
Secretary in this regard will be final.
    (v) Composite rate. (A) The fixed rate of return, FR, and the 
semiannual inflation rate, SIR, as determined in paragraphs (e)(1)(ii) 
and (iii) of this section are divided by 100 to remove the percentage 
format (i.e., to convert to decimal form) and are then combined into a 
composite annual rate, CR, in accordance with the following formula:

CR = {SIR + (FR  2) + [SIR  x  (FR  2)]}  x  2

    (B) The resulting annual rate is converted to a percentage and is 
rounded to the nearest one-hundredth of one percent. The composite 
rates will be announced by Treasury each May and November, and will be 
derived from the semiannual inflation rate announced on the same date 
and the fixed rates of return applicable to Series I savings bonds.
    (vi) Base denomination. All value calculations are performed on a 
hypothetical denomination of $25 having a value at the beginning of the 
first semiannual rate period equal to the issue price of $25. 
Redemption values for bonds of greater denominations are in direct 
proportion according to the ratio of denominations. For example, if the 
value of a hypothetical $25 denomination is $41.20--i.e., $25.00 issue 
price plus $16.20 accrued interest--on the same redemption date, the 
value of a $50 bond bearing the same issue date is $41.20  x  (50/25) 
or $82.40.
    (vii) Issue date. The issue date of a Series I bond is the first 
day of the

[[Page 38046]]

month in which payment of the issue price is received by an authorized 
issuing agent.
    (viii) Redemption value. The redemption value of a bond is that 
amount that will be paid when the bond is redeemed.
    (ix) Accrual date. Earnings on a Series I bond, if any, accrue on 
the first day of each month. The redemption value of a bond does not 
change between these accrual dates.
    (x) Semiannual rate periods. Semiannual rate periods are the six-
month periods beginning on the date of issue and on each semiannual 
anniversary of the date of issue to maturity.
    (xi) Maturity. Series I bonds have a maturity period of 30 years, 
consisting of an original period of 20 years and an automatic extension 
period of 10 years. The bonds have an interest paying life of 30 years 
after the date of issue and cease to increase in value as of that date.
    (2) Interest rates and monthly accruals. Series I composite rates, 
defined in paragraph (e)(1)(v) of this section, apply to earnings 
during the first semiannual rate period beginning on or after the 
effective date of the rate. Interest, at the composite rate from the 
beginning of the semiannual rate period, accrues according to the 
formula specified in paragraph (e)(4)(ii) of this section. The 
following table shows, for any given month of issue with composite 
rates announced each May and November, the months making up the 
semiannual rate period during which interest is earned at the composite 
rate specified in the announcement:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                          Announcement date of                                     Announcement date of 
                                         Semiannual rate period (1)       composite rate that       Semiannual rate period (2)      composite rate that 
          Month of issuance                        begins                 applies during rate                 begins                applies during rate 
                                                                               period (1)                                               period (2)      
--------------------------------------------------------------------------------------------------------------------------------------------------------
January.............................  January 1.......................  November 1 (announced 2  July 1.........................  May 1 (announced 2    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
February............................  February 1......................  November 1 (announced 3  August 1.......................  May 1 (announced 3    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
March...............................  March 1.........................  November 1 (announced 4  September 1....................  May 1 (announced 4    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
April...............................  April 1.........................  November 1 (announced 5  October 1......................  May 1 (announced 5    
                                                                         months prior to                                           months prior to      
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
May.................................  May 1...........................  May 1..................  November 1.....................  November 1.           
June................................  June 1..........................  May 1 (announced 1       December 1.....................  November 1 (announced 
                                                                         month prior to                                            1 month prior to     
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
July................................  July 1..........................  May 1 (announced 2       January 1......................  November 1 (announced 
                                                                         months prior to                                           2 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
August..............................  August 1........................  May 1 (announced 3       February 1.....................  November 1 (announced 
                                                                         months prior to                                           3 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
September...........................  September 1.....................  May 1 (announced 4       March 1........................  November 1 (announced 
                                                                         months prior to                                           4 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
October.............................  October 1.......................  May 1 (announced 5       April 1........................  November 1 (announced 
                                                                         months prior to                                           5 months prior to    
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
November............................  November 1......................  November 1.............  May 1..........................  May 1.                
December............................  December 1......................  November 1 (announced 1  June 1.........................  May 1 (announced 1    
                                                                         month prior to                                            month prior to       
                                                                         beginning of                                              beginning of         
                                                                         semiannual rate                                           semiannual rate      
                                                                         period).                                                  period).             
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: (1)Notwithstanding any consideration of the interest penalty for early redemption, interest earned during each month of a semiannual rate period 
  accrues according to the formula specified in Sec.  359.2(e)(4)(ii).                                                                                  
(2) Also, if the regularly scheduled date for a composite rate announcement is a day that Treasury is not open for business, the announcement will be   
  made on the next business day; however, the effective date of the rate will be the first day of the month of the announcement.                        

    (3) Interest penalty for Series I bonds redeemed less than five 
years following the issue dates. If a Series I bond is redeemed less 
than five years following the date of issue, the overall earning period 
from the date of issue will be reduced by three months. For example, if 
a bond issued January 1, 1999, is redeemed nine months later on October 
1, 1999, the redemption value will be determined by applying the value 
calculation procedures described in paragraph (e)(4) of this section 
and the Series I bond composite rate for that bond as if the redemption 
date were three months earlier (July 1, 1999). The redemption value of 
a bond subject to the three-month interest penalty shall not be reduced 
below the issue price. This penalty does not apply to bonds redeemed 
five years or more after the date of issue.
    (4) Redemption value calculations. (i) Interest on a bond accrues 
and becomes part of the redemption value which is paid when the bond is 
redeemed.
    (ii) The redemption value of a bond for the accrual date (the first 
day of each month) is determined in accordance with this section and 
the following:
    (A) Determine the composite rate as defined in paragraph (e)(1)(v) 
of this section. If the result of the composite rate calculation is a 
negative value, zero will be the assumed composite rate in the 
redemption value calculation. Redemption values are calculated using 
the following formula:

FV = PV  x  {[1 + (CR  2)](m ' 6)}

Where:

FV (future value) = redemption value on the accrual date rounded to 
the nearest cent.

[[Page 38047]]

PV (present value) = value at the beginning of the semiannual rate 
period calculated without consideration of penalty. For bonds that 
are older than five years, PV will equal the redemption value at the 
start of the semiannual rate period.
CR = composite rate as defined in paragraph(e)(1)(v) of this section 
converted to decimal form by dividing by 100.
m = number of full calendar months elapsed during the semiannual 
rate period.

    (B) The following hypothetical examples illustrate how this formula 
is applied:
    (1) For a bond five years or older:

    Example: i. Given a Series I bond composite rate of 5.02%, 
effective May 1, 2003, for a hypothetical bond denominated at $25, 
with an issue date of September 1, 1998, and a redemption value of 
$31.90 as of September 1, 2003, the February 1, 2004, redemption 
value is calculated as follows: bonds issue-dated in September have 
semiannual rate periods beginning each March 1 and September 1. The 
first semiannual rate period to begin on or after the date of the 
May 1, 2003, rate announcement composite rate would be the period 
beginning September 1, 2003. PV, the present value, $31.90, would be 
the redemption value of the bond at the beginning of the semiannual 
rate period (September 1, 2003). The composite rate, 5.02% converted 
to a decimal, would be 0.0502. The number of months, m, is five, 
since five full calendar months (September through January) have 
lapsed since the beginning of the semiannual rate period. FV, the 
redemption value (rounded to the nearest cent), is then the result 
of the formula:

FV = PV x {[1 + (CR  2)] (m 6)} 
where
FV = 31.90 x {[1 + (0.0502  2)] (5 6)} = $32.57

    ii. The redemption value for the actual denomination of a Series 
I bond can be determined by applying the appropriate multiple, for 
example: $32.57 x ($100.00  $25.00) for a bond with a 
$100.00 face amount; or $32.57 x ($1000.00  $25.00) for a 
bond with a $1000.00 face amount.

    (2) For a bond less than five years old:

    Example: i. Assume a composite rate of 5.07% effective May 1, 
2003, for a bond denominated at $25.00, with an issue date of 
December 1, 2000, a redemption date of February 1, 2004, and a value 
on June 1, 2003, of $28.45, without consideration of penalty. A 
three-month penalty is assessed since the redemption date is less 
than five years after the issue date. The penalty is accounted for 
by assuming that the redemption date is three months earlier 
(November 1, 2003). The February 1, 2004, redemption value is then 
calculated as follows: bonds issue-dated in December have semiannual 
rate periods that begin each June 1 and December 1. The first 
semiannual rate period to begin on or after the May 1, 2003, rate 
announcement composite rate would be the period beginning June 1, 
2003. PV, the present value, $28.45, is the value of the bond at the 
beginning of the semiannual rate period (June 1, 2003), without 
consideration of penalty. The composite rate, 5.07%, converted to a 
decimal, would be 0.0507. The number of months, m, is five, since 
five full calendar months (June through October) have elapsed since 
the beginning of the semiannual rate period and the redemption date 
(as adjusted for penalty). FV, the redemption value (rounded to the 
nearest cent), is then the result of the formula:

FV = PV x {[1 + (CR  2)] (m ' 6)} where
FV = $28.45 x {[1 + (0.0507  2)] (5 ' 6)} = $29.05

    ii. The redemption value for the actual denomination of a Series 
I bond can be determined by applying the appropriate multiple, for 
example: $29.05 x ($100.00  $25.00) for a bond with a 
$100.00 face amount; or $29.05 x ($1000.00  $25.00) for a 
bond with a $1000.00 face amount.

    (5) The Secretary's determination. The determination by the 
Secretary of the Treasury, or the Secretary's designee, of fixed rates 
of return, semiannual inflation rates, composite rates, and savings 
bond redemption values shall be final and conclusive.
    (6) Tables of redemption values. Tables of redemption values are 
made available in various formats and media, including on the Internet, 
by the Bureau of the Public Debt, Parkersburg, West Virginia 26106-
1328. Treasury reserves the right to cease making the tables of 
redemption values available in any of these formats or media. 
Redemption values published in such tables reflect the three-month 
interest penalty applied to bonds redeemed prior to five years from the 
date of issue.


Sec. 359.3  Investment considerations.

    (a) Index contingencies. (1) If a previously reported CPI is 
revised, Treasury will continue to use the previously reported CPI in 
calculating redemption values.
    (2) If the CPI is rebased to a different year, Treasury will 
continue to use the CPI based on the base reference period in effect 
when the savings bond was first issued, as long as that CPI continues 
to be published.
    (3) If, while a Series I savings bond is outstanding, the 
applicable CPI is discontinued, in the judgment of the Secretary, 
fundamentally altered in a manner materially adverse to the interests 
of an investor in the savings bond, or in the judgment of the 
Secretary, altered by legislation or Executive Order in a manner 
materially adverse to the interests of an investor in the savings bond, 
Treasury, after consulting with the Bureau of Labor Statistics, or any 
successor agency, will substitute an appropriate alternative index. 
Treasury will then notify the public of the substitute index and how it 
will be applied. Determinations of the Secretary in this regard will be 
final.
    (4) If the CPI for a particular month is not reported by the last 
day of the following month, the Treasury will announce an index number 
based on the last 12-month change in the CPI available. Any 
calculations of the Treasury's payment obligations on the inflation-
indexed savings bond that rely on that month's CPI will be based on the 
index number that Treasury has announced.
    (b) Inflation lag. (1) The inflation rate component of investor 
earnings will be determined twice each year. This rate will be the 
percentage change in the CPI-U for the six months ending each March and 
September. The rate will be included in the composite rate that is 
announced each May and November. Each composite rate will be effective 
for the entirety of all semiannual rate periods that begin while the 
rate is in effect. Thus, an inflation rate may affect interest accruals 
from 3 to 13 months from the date that the CPI-U is measured.
    (2) For example, the inflation rate determined from the CPI-U for 
the six-month period from October 1, 2003, through March 31, 2004, will 
be included in the composite rate announced on May 1, 2004. For a bond 
purchased in May 1999, this rate will go into effect immediately, since 
a new semiannual rate period for this bond will begin on May 1, 2004. 
Series I bonds issued in May begin new semiannual rate periods in the 
months of May and November. In this example, the inflation rate will 
have its earliest impact in June 2004, when interest from May accrues, 
three months after the end of the six-month CPI-U period that ends 
March 31, 2004.
    (3) As another example, the May 1, 2004, rate will apply similarly 
to a bond purchased in October 1999. Series I bonds issued in October 
begin new semiannual rate periods in the months of April and October. 
Thus, for this bond, the May 1, 2004, composite rate (which includes 
the inflation rate) will not go into effect until a new semiannual rate 
period begins on October 1, 2004. This rate, therefore, will determine 
the inflation-indexed portion of each interest accrual from November 
2004 through April 2005. In this example, the inflation rate will have 
its latest impact in April 2005, 13 months following the six-month CPI-
U period that ended March 31, 2004.
    (c) Liquidity. A Series I bond may be redeemed beginning six months 
after its issue date or at any time thereafter. However, a bond 
redeemed less than five years from its issue date will be

[[Page 38048]]

subject to a three-month interest penalty.
    (d) Early redemption penalty. If a Series I bond is redeemed less 
than five years following the date of issue, the overall earning period 
from the date of issue will be reduced by three months. For example, if 
a bond issued January 1, 1999, is redeemed nine months later on October 
1, 1999, the redemption value will be determined by applying the 
redemption value calculation procedures described in Sec. 359.2(e)(4) 
and the Series I composite rate for that bond as if the redemption date 
were three months earlier (July 1, 1999). The redemption value of a 
bond subject to the three-month interest penalty shall not be reduced 
below the issue price. This penalty does not apply to bonds redeemed 
five years or more after the date of issue.


Sec. 359.4  Registration and issue.

    (a) Registration. Bonds may be registered as set forth in 31 CFR 
part 360, subpart B, also published as Department of the Treasury 
Circular, Public Debt Series No. 2-98. Generally, bonds may be 
registered in the names of natural persons in single owner, coowner 
(for example: ``John Doe 123-45-6789 OR Mary Doe''), or beneficiary 
(``John Doe 123-45-6789 payable on death to (POD) Mary Doe'') forms of 
registration.
    (b) Validity of issue. A bond is validly issued when it is 
registered as provided in Circular No. 2-98, and when it bears an issue 
date, as well as the validation indicia of an authorized issuing agent.
    (c) Taxpayer Identifying Number (TIN). The inscription of a bond 
must include the TIN of the owner or first-named coowner. If the bond 
is being purchased as a gift or award and the owner's TIN is not known, 
the TIN of the purchaser must be included in the inscription on the 
bond.
    (d) Prohibition on chain letters. The issuance of bonds in the 
furtherance of a chain letter or pyramid scheme is against the public 
interest and is prohibited. An issuing agent is authorized to refuse to 
issue a bond or accept a purchase order if there is reason to believe 
that a purchase is in connection with a chain letter. The agent's 
decision is final.


Sec. 359.5  Limitation on purchases.

    The amount of Series I bonds which may be purchased in the name of 
any one person, in any one calendar year, is limited to $30,000 par 
value. Circular No. 2-98 (31 CFR part 360, subpart C) contains the 
rules governing the computation of amounts and the special limitation 
for employee plans.


Sec. 359.6  Purchase of bonds.

    (a) Payroll sales--(1) Payroll savings plans. Bonds may be 
purchased through deductions from the pay of employees of organizations 
that maintain payroll savings plans. The bonds must be issued by an 
authorized issuing agent.
    (2) Employee thrift, savings, vacation, and similar plans. Bonds 
registered in the names of employee plans may be purchased in book-
entry form in authorized denominations through a designated Federal 
Reserve Bank after Bureau of the Public Debt approval of the plan as 
eligible for the special limitation under 31 CFR 360.13, also published 
as Sec. 360.13 of Department of the Treasury Circular, Public Debt 
Series No. 2-98.
    (b) Over-the-counter sales--(1) Eligible issuing agents. Bonds may 
be purchased through any issuing agent, except that an organization 
serving as an issuing agent because of its status as an employer or an 
organization operating an employer's payroll savings plan under 31 CFR 
317.2(c) may sell bonds only through payroll savings plans.
    (2) Manner of sale. An application for the purchase of a bond must 
be accompanied by a remittance to cover the issue price. The purchase 
application and remittance may be submitted to an issuing agent by any 
means acceptable to the issuing agent. An application may authorize 
purchases on a recurring basis. The issuing agent bears the burden of 
collection and the risk of loss for non-collection or return of the 
remittance.


Sec. 359.7  Delivery of bonds.

    Issuing agents are authorized to arrange for the delivery of Series 
I bonds. Mail deliveries are made at the risk and expense of the United 
States to the address given by the purchaser, if it is within the 
United States, its territories or possessions, or the Commonwealth of 
Puerto Rico. No mail deliveries elsewhere will be made, except to 
residents of Mexico and Canada who participate in payroll saving plans. 
Bonds purchased by a citizen of the United States residing abroad will 
be delivered only to such address in the United States as the purchaser 
directs.


Sec. 359.8  Payment or redemption.

    (a) Incorporated banks, savings and loan associations and other 
financial institutions--(1) Payment in general. A financial institution 
qualified as a paying agent under the provisions of 31 CFR part 321, 
also published as Department of the Treasury Circular No. 750, will pay 
the current redemption value of a Series I bond presented for payment 
by an individual whose name is inscribed on the bond as owner or 
coowner, provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent, in accordance with Treasury instructions and 
identification guidelines, and signs and completes the request for 
payment.
    (2) Payment to beneficiary or legal representative. A paying agent 
may (but is not required to) pay the current redemption value of a 
Series I bond upon the request of a beneficiary, if he or she survives 
the owner, or a legal representative designated in the bond 
registration by name and capacity, or a court-appointed representative 
of the last-deceased registrant's estate provided:
    (i) The bond is in order for payment; and
    (ii) The presenter establishes his or her identity to the 
satisfaction of the agent in accordance with Treasury instructions and 
identification guidelines, and otherwise complies with evidentiary 
requirements.
    (b) Federal Reserve Banks and Branches. A Federal Reserve Bank or 
Branch referred to in Sec. 359.14 will pay the current redemption value 
of a Series I bond presented for payment, provided the bond is in order 
for payment and the request for payment on the bond is properly signed 
and certified in accordance with Circular No. 2-98.


Sec. 359.9  Taxation.

    (a) General. The increment in value, represented by the difference 
between the face (par amount) of a Series I bond and the redemption 
value received for it, is interest. This interest is subject to all 
taxes imposed under the Internal Revenue Code of 1986, as amended. The 
bonds are subject to estate, inheritance, gift, or other excise taxes, 
whether Federal or State, but are exempt from all other taxation now or 
hereafter imposed on the principal or interest by any State, any 
possession of the United States or any local taxing authority.
    (b) Federal income tax on bonds. (1) An owner of Series I bonds may 
use either of the following two methods for reporting the increase in 
the redemption value of the bond for Federal income tax purposes:
    (i) Cash basis. Defer reporting the increase to the year of final 
maturity, redemption, or other disposition, whichever is earlier; or
    (ii) Accrual basis. Elect to report the increase each year as it 
accrues, in which case the election applies to all Series I bonds then 
owned by the

[[Page 38049]]

taxpayer and those subsequently acquired as well as to any other 
obligations purchased on a discount basis, such as savings bonds of 
Series E or EE.
    (2) If the method in paragraph (b)(1)(i) of this section is used, 
the taxpayer may change to the method in paragraph (b)(1)(ii) of this 
section without obtaining permission from the Internal Revenue Service. 
However, once the election to use the method in paragraph (b)(1)(ii) of 
this section is made, the taxpayer may change the method of reporting 
only by following the specific procedure prescribed by the Internal 
Revenue Service. For further information, the District Director of the 
taxpayer's district, or the Internal Revenue Service, Washington, DC 
20224, should be consulted.
    (c) Reissue. A reissue that affects the rights of any of the 
persons named on a Series I bond may have a tax consequence.


Sec. 359.10  Education savings bond program.

    A bond owner or coowner may be able to exclude from income for 
Federal income tax purposes all or part of the interest received on the 
redemption of qualified savings bonds during the year, if that owner or 
coowner paid qualified higher education expenses during the same year 
and certain other conditions are satisfied. This exclusion is known as 
the Education Savings Bond Program, and authoritative information about 
the program can be found in Internal Revenue Service Publication 17, 
``Your Federal Income Tax'', and Publication 550, ``Investment Income 
and Expenses.''


Sec. 359.11  Reservation as to book-entry bonds.

    The Commissioner of the Public Debt, as designee of the Secretary 
of the Treasury, reserves the right: To convert at any time, in whole 
or in part, any definitive Series I savings bonds to book-entry Series 
I savings bonds; and to issue Series I savings bonds only in book-entry 
form. The Commissioner's action in any such respect is final.


Sec. 359.12  Reservation as to issue of bonds.

    The Commissioner of the Public Debt, as designee of the Secretary 
of the Treasury, is authorized to reject any application for Series I 
bonds, in whole or in part, and to refuse to issue, or permit to be 
issued, any bonds in any case or class of cases, if the Commissioner 
deems the action to be in the public interest, and the Commissioner's 
action in any such respect is final.


Sec. 359.13  Waiver.

    The Commissioner of the Public Debt, as designee of the Secretary 
of the Treasury, may waive or modify any provision of this Circular in 
any particular case or class of cases for the convenience of the United 
States or in order to relieve any person or persons of unnecessary 
hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject 
the United States to any substantial expense or liability.


Sec. 359.14  Fiscal agents.

    (a) Federal Reserve Banks and Branches referred to below, as fiscal 
agents of the United States, are authorized to perform such services as 
may be requested of them by the Secretary of the Treasury, or his or 
her designee, in connection with the issue, servicing and redemption of 
Series I bonds. The Federal Reserve Banks and Branches, as fiscal 
agents of the United States, are subject to change (for example, due to 
consolidation), as determined by the Secretary of the Treasury, or his 
or her designee.
    (b) The following Federal Reserve Offices have been designated to 
provide savings bond services:

----------------------------------------------------------------------------------------------------------------
            Servicing office                Reserve district served              Geographic area served         
----------------------------------------------------------------------------------------------------------------
Federal Reserve Bank, Buffalo Branch,     New York, Boston...........  Connecticut, Maine, Massachusetts, New   
 160 Delaware Avenue, Buffalo, NY 14202.                                Hamsphire, New Jersey (northern half),  
                                                                        New York, Rhode Island, Vermont, Puerto 
                                                                        Rico, Virgin Islands.                   
Federal Reserve Bank, Pittsburgh Branch,  Cleveland, Philadephia.....  Delaware, Kentucky (eastern half), New   
 717 Grant Street, Pittsburgh, PA 15219.                                Jersey (southern half), Ohio,           
                                                                        Pennsylvania, West Virginia (northern   
                                                                        panhandle).                             
Federal Reserve Bank of Richmond, 701     Richmond, Atlanta..........  Alabama, District of Columbia, Florida,  
 East Byrd Street, Richmond, VA 23219.                                  Georgia, Louisiana (southern half),     
                                                                        Maryland, Mississippi (southern half),  
                                                                        North Carolina, South Carolina,         
                                                                        Tennessee (eastern half), Virginia, West
                                                                        Virginia (except northern panhandle).   
Federal Reserve Bank of Minneapolis, 90   Minneapolis, Chicago.......  Illinois (northern half), Indiana        
 Hennepin Avenue, Minneapolis, MN 55401.                                (northern half), Iowa, Michigan,        
                                                                        Minnesota, Montana, North Dakota, South 
                                                                        Dakota, Wisconsin.                      
Federal Reserve Bank of Kansas City, 925  Dallas, Kansas City, St.     Alaska, Arizona, Arkansas, California,   
 Grand Boulevard, Kansas City, MO 64106.   Louis, San Francisco.        Colorado, Hawaii, Idaho, Illinois       
                                                                        (southern half), Indiana (southern      
                                                                        half), Kansas, Kentucky (western half), 
                                                                        Louisiana (northern half), Mississippi  
                                                                        (northern half), Missouri, Nebraska,    
                                                                        Nevada, New Mexico, Oklahoma, Oregon,   
                                                                        Tennessee (western half), Texas, Utah,  
                                                                        Washington, Wyoming, Guam.              
----------------------------------------------------------------------------------------------------------------

Sec. 359.15  Reservation as to terms of offer.

    The Secretary of the Treasury may at any time or from time to time 
supplement or amend the terms of this offering of bonds.
    30. Part 360 is added to read as follows:

PART 360--REGULATIONS GOVERNING UNITED STATES SAVINGS BONDS, SERIES 
I

Subpart A--General Information

Sec.
360.0  Applicability.
360.1  Official agencies.
360.2  Definitions.

Subpart B--Registration

360.5  General rules.
360.6  Authorized forms of registration.
360.7  Chain letters prohibited.

Subpart C--Limitations on Annual Purchases

360.10  Amounts which may be purchased.
360.11  Computation of amount.

[[Page 38050]]

360.12  Disposition of excess.
360.13  Employee plans--Conditions of eligibility.

Subpart D--Limitations on Transfer or Pledge

360.15  Transfer.
360.16  Pledge.

Subpart E--Judicial Proceedings

360.20  General.
360.21  Payment to judgment creditors.
360.22  Payment or reissue pursuant to divorce.
360.23  Evidence.
360.24  Payment pursuant to judicial or administrative forfeiture.

Subpart F--Relief for Loss, Theft, Destruction, Mutilation, Defacement, 
or Nonreceipt of Bonds

360.25  General.
360.26  Application for relief; after receipt of bond.
360.27  Application for relief; nonreceipt of bond.
360.28  Recovery or receipt of bond before or after relief is 
granted.
360.29  Adjudication of claims.

Subpart G--General Provisions for Payment

360.35  Payment (redemption).
360.36  Payment during life of sole owner.
360.37  Payment during lives of both coowners.
360.38  Payment during lifetime of owner of beneficiary bond.
360.39  Surrender for payment.
360.40  Special provisions for payment.
360.41  Partial redemption.
360.42  Nonreceipt or loss of remittance issued in payment.
360.43  Effective date of request for payment.
360.44  Withdrawal of request for payment.

Subpart H--Reissue and Denominational Exchange

360.45  General.
360.46  Effective date of request for reissue.
360.47  Authorized reissue; during lifetime.
360.48  Restrictions on reissue; denominational exchange.
360.49  Correction of errors.
360.50  Change of name.
360.51  Requests for reissue.

Subpart I--Certifying Officers

360.55  Individuals authorized to certify.
360.56  General instructions and liability.
360.57  When a certifying officer may not certify.
360.58  Forms to be certified.

Subpart J--Minors, Incompetents, Aged Persons, Absentees, et al.

360.60  Payment to representative of an estate.
360.61  Payment after death.
360.62  Payment to minor.
360.63  Payment to a parent or other person on behalf of a minor.
360.64  Payment or reinvestment--voluntary guardian of an 
incapacitated person.
360.65  Reissue.

Subpart K--Deceased Owner, Coowner or Beneficiary

360.70  General rules governing entitlement.
360.71  Estate administered.
360.72  Procedures for the payment or reissue of bonds that are 
property belonging to a decedent's estate.

Subpart L--Fiduciaries

360.75  Payment or reissue during the existence of the fiduciary 
estate.
360.76  Payment or reissue after termination of the fiduciary 
estate.

Subpart M--Miscellaneous Provisions

360.90  Waiver of regulations.
360.91  Additional requirements; bond of indemnity.
360.92  Supplements, amendments, or revisions.

    Authority: 5 U.S.C. 301; 31 U.S.C. 3105 and 3125.

Subpart A--General Information


Sec. 360.0  Applicability.

    The regulations in this circular, Department of the Treasury 
Circular, Public Debt Series No. 2-98 (this part 360), govern 
transactions in United States Savings Bonds of Series I. These bonds 
bear issue dates of September 1, 1998, or thereafter.


Sec. 360.1  Official agencies.

    (a) The Bureau of the Public Debt of the Department of the Treasury 
is responsible for administering the Savings Bond Program. Authority to 
process transactions has been delegated to Federal Reserve Banks and 
Branches listed in paragraph (b) of this section, as fiscal agents of 
the United States. The Federal Reserve Banks and Branches, and their 
authority to process transactions, as fiscal agents of the United 
States, are subject to change, as determined by the Secretary of the 
Treasury, or his or her designee.
    (b) Communications concerning transactions and requests for forms 
should be addressed to:
    (1) A Federal Reserve Bank or Branch in the list below; or, the 
Bureau of the Public Debt, 200 Third Street, Parkersburg, WV 26106-
1328.
    (2) The following Federal Reserve Offices have been designated to 
provide savings bond services:

----------------------------------------------------------------------------------------------------------------
            Servicing office                Reserve district served              Geographic area served         
----------------------------------------------------------------------------------------------------------------
Federal Reserve Bank, Buffalo Branch,     New York, Boston...........  Connecticut, Maine, Massachusetts, New   
 160 Delaware Avenue, Buffalo, NY 14202.                                Hampshire, New Jersey, (northern half), 
                                                                        New York, Rhode Island, Vermont, Puerto 
                                                                        Rico, Virgin Islands.                   
Federal Reserve Bank, Pittsburgh Branch,  Cleveland, Philadelphia....  Delaware, Kentucky (eastern half), New   
 717 Grant Street, Pittsburgh, PA 15219.                                Jersey, (southern half), Ohio,          
                                                                        Pennsylvania, West Virginia.            
Federal Reserve Bank of Richmond, 701     Richmond, Atlanta..........  Alabama, District of Columbia, Florida,  
 East Byrd Street, Richmond, VA 23219.                                  Georgia, Louisiana, (southern half),    
                                                                        Maryland, Mississippi (southern half),  
                                                                        North Carolina, South Carolina,         
                                                                        Tennessee (eastern half), Virginia, West
                                                                        Virginia (except northern panhandle).   
Federal Reserve Bank of Minneapolis, 90   Minneapolis, Chicago.......  Illinois (northern half), Indiana,       
 Hennepin Avenue, Minneapolis, MN 55401.                                (northern half), Iowa, Michigan,        
                                                                        Minnesota, Montana, North Dakota, South 
                                                                        Dakota, Wisconsin.                      
Federal Reserve Bank of Kansas City, 925  Dallas, San Francisco,       Alaska, Arizona, Arkansas, California,   
 Grand Boulevard, Kansas City, MO 64106.   Kansas City, St. Louis.      Colorado, Hawaii, Idaho, Illinois       
                                                                        (southern half), Indiana (southern      
                                                                        half), Kansas, Kentucky, (western half),
                                                                        Louisiana (northern half), Mississippi  
                                                                        (northern half), Missouri, Nebraska,    
                                                                        Nevada, New Mexico, Oklahoma, Oregon,   
                                                                        Tennessee (western half), Texas, Utah,  
                                                                        Washington, Wyoming, Guam.              
----------------------------------------------------------------------------------------------------------------


[[Page 38051]]

    (c) Notices and documents must be filed with the agencies referred 
to in paragraphs (a) and (b) of this section and as indicated in the 
regulations in this part.


Sec. 360.2  Definitions.

    (a) Bond means a United States Savings Bond of Series I, either in 
book-entry form, represented by an accounting entry or electronic 
record of a Federal Reserve Bank acting as fiscal agent of the United 
States, or the Department of the Treasury, or in definitive form, as a 
certificate.
    (b) Incompetent means an individual who is incapable of handling 
his or her business affairs because of a legal, mental or medical 
disability, except that a minor is not an incompetent solely because of 
age.
    (c) Issuing agent means an organization that has been qualified 
under the provisions of Department of the Treasury Circular, Public 
Debt Series No. 4-67, as revised and amended (31 CFR part 317), to 
issue savings bonds.
    (d) Paying agent means a financial institution that has been 
qualified under the provisions of Department of the Treasury Circular 
No. 750, as revised and amended (31 CFR part 321), to make payment of 
savings bonds.
    (e) Payment means redemption, unless otherwise indicated by the 
context.
    (f) Person means a legal entity including an individual or 
fiduciary estate.
    (g) Personal trust estates means trust estates established by 
natural persons in their own right for the benefit of themselves or 
other natural persons in whole or in part, and common trust funds 
comprised in whole or in part of such trust estates.
    (h) Reissue means the cancellation and retirement of a bond and the 
issuance of a new bond or bonds of the same series, same issue date, 
and same total face amount.
    (i) Representative of the estate of a minor, incompetent, aged 
person, absentee, et al. means the court-appointed or otherwise 
qualified person, regardless of title, who is legally authorized to act 
for the individual. The term does not include parents in their own 
right, voluntary or natural guardians, attorneys-in-fact, trustees of 
personal and similar trust estates, or the executors or administrators 
of decedents' estates.
    (j) Surrender means the actual receipt of a definitive bond with an 
appropriate request for payment or reissue by either a Federal Reserve 
Bank or Branch or the Bureau of the Public Debt, or, if a paying agent 
is authorized to handle the transaction, the actual receipt of the 
definitive bond and the request for payment by the paying agent.
    (k) Taxpayer Identifying Number means a social security account 
number or an employer identification number.
    (l) Voluntary guardian means an individual who is recognized as 
authorized to act for an incompetent, as provided by Sec. 360.64.

Subpart B--Registration


Sec. 360.5  General rules.

    (a) Registration is conclusive of ownership. Savings bonds of 
Series I are issued only in registered form. The registration must 
express the actual ownership of, and interest in, the bond. The 
registration is conclusive of ownership, except as provided in 
Sec. 360.49.
    (b) Requests for registration. (1) Registrations requested must be 
clear, accurate and complete, conform substantially with one of the 
forms set forth in this subpart, and include the taxpayer identifying 
number of the owner or first-named coowner. The registration of all 
bonds owned by the same individual or fiduciary estate should be 
uniform with respect to the name of the owner and any description of 
the fiduciary capacity.
    (2) An individual should be designated by the name he or she is 
ordinarily known by or uses in business, including at least one full 
given name. The name may be preceded or followed by any applicable 
title, such as Mr., Mrs., Ms., Miss, Dr., Rev., M.D., or D.D. A suffix, 
such as Sr. or Jr., must be included when ordinarily used or when 
necessary to distinguish the owner from another member of his family. A 
married woman's own first name, not that of her husband, must be used, 
for example, Mary A. Jones or Mrs. Mary A. Jones, NOT Mrs. Frank B. 
Jones. The address must include, where appropriate, the number and 
street, route, or any other local feature, city, State, and ZIP Code.
    (c) Inscription of bonds purchased as gifts. If the bonds are 
purchased as gifts, awards, prizes, etc., and the taxpayer identifying 
numbers of the intended owners are not known, the purchaser's number 
must be furnished. Bonds so inscribed will not be associated with the 
purchaser's own holdings. A bond registered in the name of a purchaser 
with another person as coowner or beneficiary is not considered a gift 
or an award. If the purchaser so requests, a bond may be inscribed to 
provide a ``Mail to'' instruction, followed by a delivery name and 
address. No rights of ownership are conferred on such designee.


Sec. 360.6  Authorized forms of registration.

    Subject to any limitations or restrictions contained in these 
regulations on the right of any person to be named as owner, coowner, 
or beneficiary, bonds should be registered as indicated in this 
section. A savings bond inscribed in a form not substantially in 
agreement with one of the forms authorized by this subpart is not 
considered validly issued.
    (a) Natural persons. A bond may be registered in the names of 
individuals in their own right, but only in one of the forms authorized 
by this paragraph (a).
    (1) Single ownership form. A bond may be registered in the name of 
one individual.

    Example: Julie B. Jones, 123-45-6789.

    (2) Coownership form. A bond may be registered in the names of two 
individuals in the alternative as coowners. The form of registration 
``A and B'' is not authorized.

    Examples: David R. Johnson 123-45-6789 or Anna B. Johnson. Maria 
S. Gonzalez 987-65-4321 or Juan C. Gonzalez.

    (3) Beneficiary form. A bond may be registered in the name of one 
individual payable on death to another. ``Payable on death to'' may be 
abbreviated to ``P.O.D.''.

    Examples: Catherine B. Jordan 123-45-6789 payable on death to 
Daniel A. Jordan. Henry C. Rodriguez 123-45-6789 P.O.D. Maria S. 
Rodriguez.

    (b) Fiduciaries (including legal guardians, trustees, and similar 
representatives). (1) General. A bond may be registered in the name of 
any person or persons or any organization acting as fiduciary of a 
single fiduciary estate, but not where the fiduciary will hold the bond 
merely or principally as security for the performance of a duty, 
obligation, or service. A bond's registration should conform to a form 
authorized by this paragraph. A common trust fund established and 
maintained by a financial institution authorized to act as a fiduciary 
will be considered a single fiduciary estate within the meaning of the 
regulations in this part.
    (2) Legal guardians, conservators, similar representatives, certain 
custodians, etc. A bond may be registered in the name and fiduciary 
capacity of the legally appointed or authorized representative of the 
estate of a minor, incompetent, aged or infirm person, absentee, et 
al., or of a personal or testamentary trust.


[[Page 38052]]


    Examples: Tenth National Bank, Guardian (or Conservator, 
Trustee, etc.) of the Estate of George N. Brown 123-45-6789, a minor 
(or an incompetent, aged person, infirm person, or absentee). Henry 
C. Smith, Conservator of the Estate of John R. White 123-45-6789, an 
adult, pursuant to Sec. 633.572 of the Iowa Code. Juan B. Gonzalez 
123-45-6789, a minor (or an incompetent) under custodianship by 
designation of the Veterans Administration. Frank M. Redd 123-45-
6789, an incompetent for whom Eric A. Redd has been designated 
trustee by the Department of the Army pursuant to 37 U.S.C. 602. 
Richard A. Rowe 123-45-6789, for whom Reba L. Rowe is representative 
payee for social security benefits (or black lung benefits, as the 
case may be). Henry L. Green 123-45-6789 or George M. Brown, a minor 
under legal guardianship of the Tenth National Bank. Henry L. Green 
123-45-6789 P.O.D. George M. Brown, a minor under legal guardianship 
of the Tenth National Bank. Harbor State Hospital and School, 
selected payee for Beth R. Weber 123-45-6789, a Civil Service 
annuitant, pursuant to 5 U.S.C. 8345(e). John F. Green or Mary B. 
Doe, Trustees of the Estate of Moe Green 123-45-6789. Thomas J. 
White and Tenth National Bank, Trustees under the Will of Robert J. 
Benjamin, deceased 12-3456789. Tenth National Bank, Trustee under 
Agreement with Mark S. Dunston, dated 2/1/98, 12-3456789. Ruth B. 
Grace and Pat A. Banks, Trustees under Agreement with Susan L. 
Chambers, dated 7/30/97, 12-3456789. Dennis R. Adams, Trustee under 
Declaration of Trust, dated 5/1/98, 12-3456789.

    (3) Employee thrift, savings, vacation and similar plans. Bonds may 
be registered in the name and title, or title alone, of the trustee of 
an eligible employee thrift, savings, vacation, 401(k) or similar plan, 
as defined in Sec. 360.13. If the instrument creating the trust 
provides that the trustees shall serve for a limited term, their names 
may be omitted.

    Examples: Tenth National Bank, trustee of Pension Fund of Safety 
Manufacturing Company, U/A with the company, dated March 31, 1996, 
12-3456789.
    Trustees of Retirement Fund of Safety Manufacturing Company, 
under directors' resolution adopted March 31, 1996, 12-3456789.
    County Trust Company, trustee of the Employee Savings Plan of 
Jones Company, Inc., U/A dated January 17, 1996, 12-3456789.
    Trustees of the Employee Savings Plan of Brown Brothers, Inc., 
U/A dated January 20, 1996, 12-3456789.

    (c) The United States Treasury. A person who desires to have a bond 
become the property of the United States upon his or her death may 
designate the United States Treasury as beneficiary.

    Example: George T. Jones 123-45-6789 P.O.D. the United States 
Treasury.


Sec. 360.7  Chain letters prohibited.

    The issuance of bonds in the furtherance of a chain letter, 
pyramid, or similar scheme is against the public interest and is 
prohibited.

Subpart C--Limitations on Annual Purchases


Sec. 360.10  Amounts which may be purchased.

    The amount of savings bonds of Series I which may be purchased and 
held, in the name of any one person in any one calendar year, is 
computed according to the provisions of Sec. 360.11 and is limited as 
follows:
    (a) General annual limitation, $30,000 (par value).
    (b) Special limitation, $4,000 (par value) multiplied by the 
highest number of employees participating in an eligible employee plan, 
as defined in Sec. 360.13, at any time during the calendar year in 
which the bonds are issued.


Sec. 360.11  Computation of amount.

    (a) General. The purchases of bonds in the name of any person in an 
individual capacity are computed separately from purchases in a 
fiduciary capacity, e.g., as representative for the estate of an 
individual.
    (b) Bonds included in computation. In computing the purchases for 
each person, the following outstanding bonds are included:
    (1) All bonds registered in the name and bearing the taxpayer 
identifying number of that person alone;
    (2) All bonds registered in the name of the representative of the 
estate of that person and bearing that person's taxpayer identifying 
number; and
    (3) All bonds registered in the name of that person as coowner that 
also bear that person's taxpayer identifying number.
    (c) Bonds excluded from computation. In computing the purchases for 
each person, the following are excluded:
    (1) Bonds on which that person is named beneficiary;
    (2) Bonds to which that person has become entitled--
    (i) Under Sec. 360.70 as surviving beneficiary upon the death of 
the registered owner;
    (ii) As an heir or a legatee of the deceased owner;
    (iii) By virtue of the termination of a trust or the happening of a 
similar event; and
    (3) Bonds that are purchased and redeemed within the same calendar 
year.


Sec. 360.12  Disposition of excess.

    If any person at any time has savings bonds issued during any one 
calendar year in excess of the prescribed amount, instructions should 
be obtained from the Bureau of the Public Debt, Parkersburg, WV 26106-
1328, for appropriate adjustment of the excess. Under the conditions 
specified in Sec. 360.90, the Commissioner of the Public Debt may 
permit excess purchases to stand in any particular case or class of 
cases.


Sec. 360.13  Employee plans--Conditions of eligibility.

    (a) Definition of plan. Employee thrift, savings, vacation, 401(k), 
and similar plans are contributory plans established by the employer 
for the exclusive and irrevocable benefit of its employees or their 
beneficiaries. Each plan must afford employees the means of making 
regular savings from their wages through payroll deductions and provide 
for employer contributions to be added to these savings.
    (b) Definition of terms used in this section. (1) The term assets 
means all the employees' contributions and assets purchased with them 
and the employer's contributions and assets purchased with them, as 
well as accretions, such as dividends on stock, the increment in value 
on bonds and all other income; but, notwithstanding any other provision 
of this section, the right to demand and receive all assets credited to 
the account of an employee shall not be construed to require the 
distribution of assets in kind when it would not be possible or 
practicable to make such a distribution; for example, Series I bonds 
may not be reissued in unauthorized denominations.
    (2) The word beneficiary means:
    (i) The person or persons, if any, designated by the employee in 
accordance with the terms of the plan to receive the benefits of the 
plan upon the employee's death; or
    (ii) The estate of the employee.
    (c) Conditions of eligibility. An employee plan must conform to the 
following rules in order to be eligible for the special limitation 
provided in Sec. 360.10.
    (1) Crediting of assets. All assets of a plan must be credited to 
the individual accounts of participating employees and may be 
distributed only to them or their beneficiaries, except as provided in 
paragraph (c)(3) of this section.
    (2) Purchase of bonds. Bonds may be purchased only with assets 
credited to the accounts of participating employees and only if the 
amount taken from any account at any time for that purpose is equal to 
the purchase price of a $50 bond or bonds in an authorized denomination 
or denominations, and shares in the bonds are credited to the

[[Page 38053]]

accounts of the individuals from which the purchase price was derived, 
in amounts corresponding with their shares. For example, if $100 
credited to the account of John Jones is commingled with funds credited 
to the accounts of other employees to make a total of $5,000 with which 
a Series I bond in the denomination of $5,000 (face amount) is 
purchased in December 1998 and registered in the name and title of the 
trustee, the plan must provide, in effect, that John Jones' account be 
credited to show that he is the owner of a Series I bond in the 
denomination of $100 (face amount) bearing an issue date of December 1, 
1998.
    (3) Irrevocable right of withdrawal. Each participating employee 
has an irrevocable right to request and receive from the trustee all 
assets credited to the employee's account (or their value, if the 
employee prefers) without regard to any conditions other than the loss 
or suspension of the privilege of participating further in the plan. A 
plan may limit or modify such right in any manner required for 
qualification of the plan under section 401 of the Internal Revenue 
Code of 1986, as amended (26 U.S.C. 401).
    (4) Rights of beneficiary. Upon the death of an employee, his or 
her beneficiary shall have the absolute and unconditional right to 
demand and receive from the trustee all assets credited to the account 
of the employee or their value, if he or she so prefers.
    (5) Reissue or payment upon distribution. (i) When settlement is 
made with an employee or his or her beneficiary with respect to any 
bond registered in the name and title of the plan trustee in which the 
employee has a share, the bond must be paid or reissued to the extent 
of the share.
    (ii) If an employee or the beneficiary is to receive distribution 
in kind, bonds bearing the same issue dates as those credited to the 
employee's account will be reissued in the name of the employee or the 
employee's beneficiary to the extent entitled, in authorized 
denominations, in any authorized form of registration, upon the request 
and certification of the trustee.
    (d) Application for special limitation. A trustee of an employee 
plan who desires to purchase bonds under the special limitation should 
submit to the designated Federal Reserve Bank or Branch a copy of:
    (1) The plan;
    (2) Any instructions issued under the plan that concern Series I 
bonds; and
    (3) The trust agreement, in order to establish the plan's 
eligibility.
    (e) Vacation plans. Savings bonds may be purchased under certain 
vacation plans. Questions concerning the eligibility of these plans to 
purchase bonds in excess of the general limitation should be addressed 
to the Bureau of the Public Debt, Parkersburg, WV 26106-1328.

Subpart D--Limitations on Transfer or Pledge


Sec. 360.15  Transfer.

    Savings bonds are not transferable and are payable only to the 
owners named on the bonds, except as specifically provided in these 
regulations and then only in the manner and to the extent so provided.


Sec. 360.16  Pledge.

    A savings bond may not be hypothecated, pledged, or used as 
security for the performance of an obligation.

Subpart E--Judicial Proceedings


Sec. 360.20  General.

    (a) The Department of the Treasury will not recognize a judicial 
determination that gives effect to an attempted voluntary inter vivos 
transfer of a bond, or a judicial determination that impairs the rights 
of survivorship conferred by the regulations in this part upon a 
coowner or beneficiary. All provisions of this subpart are subject to 
these restrictions, except as provided in Sec. 360.24.
    (b) The Department of the Treasury will recognize a claim against 
an owner of a savings bond and conflicting claims of ownership of, or 
interest in, a bond between coowners or between the registered owner 
and the beneficiary, if established by valid judicial proceedings, but 
only as specifically provided in this subpart. Section 360.23 specifies 
the evidence required to establish the validity of the judicial 
proceedings.
    (c) The Department of the Treasury and the agencies that issue, 
reissue, or redeem savings bonds will not accept a notice of an adverse 
claim or notice of pending judicial proceedings, nor undertake to 
protect the interests of a litigant not in possession of a savings 
bond.


Sec. 360.21  Payment to judgment creditors.

    (a) Purchaser or officer under levy. The Department of the Treasury 
will pay (but not reissue) a savings bond to the purchaser at a sale 
under a levy or to the officer authorized under appropriate process to 
levy upon property of the registered owner or coowner to satisfy a 
money judgment. Payment will be made only to the extent necessary to 
satisfy the money judgment. The amount paid is limited to the 
redemption value 60 days after the termination of the judicial 
proceedings. Except in the case of a levy by the Internal Revenue 
Service, payment of a bond registered in coownership form pursuant to a 
judgment or a levy against only one coowner is limited to the extent of 
that coowner's interest in the bond. That interest must be established 
by an agreement between the coowners or by a judgment, decree, or order 
of a court in a proceeding to which both coowners are parties. Payment 
of a bond registered in coownership form pursuant to a levy by the 
Internal Revenue Service will be made if the levy is against either 
coowner on the bond.
    (b) Trustee in bankruptcy, receiver, or similar court officer. The 
Department of the Treasury will pay, at current redemption value, a 
savings bond to a trustee in bankruptcy, a receiver of an insolvent's 
estate, a receiver in equity, or a similar court officer under the 
provisions of paragraph (a) of this section.


Sec. 360.22  Payment or reissue pursuant to divorce.

    (a) Divorce. (1) The Department of the Treasury will recognize a 
divorce decree that ratifies or confirms a property settlement 
agreement disposing of bonds or that otherwise settles the interests of 
the parties in a bond. Reissue of a savings bond may be made to 
eliminate the name of one spouse as owner, coowner, or beneficiary or 
to substitute the name of one spouse for that of the other spouse as 
owner, coowner, or beneficiary pursuant to the decree. However, if the 
bond is registered in the name of one spouse with another person as 
coowner, there must be submitted either:
    (i) A request for reissue by the other person; or
    (ii) a certified copy of a judgment, decree, or court order entered 
in proceedings to which the other person and the spouse named on the 
bond are parties, determining the extent of the interest of that spouse 
in the bond. Reissue will be permitted only to the extent of that 
spouse's interest.
    (2) The evidence required under Sec. 360.23 must be submitted in 
every case. When the divorce decree does not set out the terms of the 
property settlement agreement, a certified copy of the agreement must 
be submitted. Payment, rather than reissue, will be made if requested.
    (b) Date for determining rights. When payment or reissue under this 
section is to be made, the rights of the parties will be those existing 
under the regulations

[[Page 38054]]

current at the time of the entry of the final judgment, decree, or 
court order.


Sec. 360.23  Evidence.

    (a) General. To establish the validity of judicial proceedings, 
certified copies of the final judgment, decree, or court order, and of 
any necessary supplementary proceedings, must be submitted. If the 
judgment, decree, or court order was rendered more than six months 
prior to the presentation of the bond, there must also be submitted a 
certification from the clerk of the court, under court seal, dated 
within six months of the presentation of the bond, showing that the 
judgment, decree, or court order is in full force.
    (b) Trustee in bankruptcy or receiver of an insolvent's estate. A 
request for payment by a trustee in bankruptcy or a receiver of an 
insolvent's estate must be supported by appropriate evidence of 
appointment and qualification. The evidence must be certified by the 
clerk of the court, under court seal, as being in full force on a date 
that is not more than six months prior to the presentation of the bond.
    (c) Receiver in equity or similar court officer. A request for 
payment by a receiver in equity or a similar court officer, other than 
a receiver of an insolvent's estate, must be supported by a copy of an 
order that authorizes the presentation of the bond for redemption, 
certified by the clerk of the court, under court seal, as being in full 
force on a date that is not more than six months prior to the 
presentation of the bond.


Sec. 360.24  Payment pursuant to judicial or administrative forfeiture.

    (a) Definitions. As used in this part:
    (1) Contact point means the individual designated to receive 
referrals from the Bureau of the Public Debt, as provided for in this 
section, by the Federal investigative agency, United States Attorney's 
Office, or forfeiting agency specified in Public Debt Form 1522.
    (2) Forfeiting agency means the federal law enforcement agency 
responsible for the forfeiture.
    (3) Forfeiture. (i) Administrative forfeiture means the process by 
which property may be forfeited by a federal agency rather than through 
judicial proceedings.
    (ii) Judicial forfeiture means either a civil or a criminal 
proceeding in a United States District Court that may result in a final 
judgment and order of forfeiture.
    (4) Public Debt Form 1522 means the written notification of the 
forfeiture provided by the forfeiting agency to the Bureau of the 
Public Debt on a Public Debt Form 1522 SPECIAL FORM OF REQUEST FOR 
PAYMENT OF UNITED STATES SAVINGS AND RETIREMENT SECURITIES WHERE USE OF 
A DETACHED REQUEST IS AUTHORIZED. Public Debt Form 1522 must specify: 
the contact point; the issue date of each bond; the serial number for 
each bond; the date of forfeiture; the forfeiture fund to which payment 
is to be made; and be signed by an individual authorized by the 
forfeiting agency. The forfeited bonds and the completed Public Debt 
Form 1522 are to be mailed to the Department of the Treasury, Bureau of 
the Public Debt, Parkersburg, WV 26106-1328.
    (b) Forfeiture of bond. (1) Upon receipt and review of the Public 
Debt Form 1522, as described in paragraph (a)(4) of this section, the 
Bureau of the Public Debt will make payment to the forfeiture fund 
specified on the form.
    (2) The Bureau of the Public Debt will record the forfeiture, the 
forfeiture fund into which the proceeds were paid, the contact point, 
and any related information.
    (3) The Bureau of the Public Debt will rely exclusively upon the 
information provided by the Federal agency in the Public Debt Form 1522 
and will not make any independent evaluation of the validity of the 
forfeiture order, the request for payment, or the authority of the 
individual signing the request for payment.
    (4) The amount paid is limited to the redemption value of the 
savings bonds as of the date of forfeiture specified in the Public Debt 
Form 1522.
    (c) Inquiry from previous owner. (1) Upon payment made pursuant to 
paragraph (b) of this section, all inquiries from the previous owner, 
including requests for payment, reissue, or applications for relief, 
related to forfeited savings bonds, will be referred by the Bureau of 
the Public Debt to the contact point named in the Public Debt Form 
1522.
    (2) The Bureau of the Public Debt will notify the submitter of the 
inquiry of the referral to the contact point.
    (3) The Bureau of the Public Debt will not investigate the inquiry 
and will defer to the forfeiting agency's determination of the 
appropriate course of action, including settlement where appropriate. 
Any settlement will be paid from the forfeiture fund into which the 
proceeds were deposited.

Subpart F--Relief for Loss, Theft, Destruction, Mutilation, 
Defacement, or Nonreceipt of Bonds


Sec. 360.25  General.

    Relief, by the issue of a substitute bond or by payment, is 
authorized for the loss, theft, destruction, mutilation, or defacement 
of a bond after receipt by the owner or his or her representative. As a 
condition for granting relief, the Commissioner of the Public Debt, as 
designee of the Secretary of the Treasury, may require a bond of 
indemnity, in the form, and with the surety, or security, he or she 
considers necessary to protect the interests of the United States. In 
all cases, the claimant or claimants must identify the lost, stolen, 
destroyed, mutilated, or defaced savings bond or savings bonds by 
serial number or serial numbers and must submit satisfactory evidence 
of the loss, theft, or destruction, or a satisfactory explanation of 
the mutilation or defacement.


Sec. 360.26  Application for relief; after receipt of bond.

    (a) If the serial numbers of the lost, stolen, or destroyed bonds 
are known, the claimant should execute an application for relief on the 
appropriate form and submit it to the Bureau of the Public Debt, 
Parkersburg, WV 26106-1328.
    (b) If the bond serial numbers are not known, the claimant must 
provide sufficient information to enable the Bureau of the Public Debt 
to identify the bond by serial number. See Sec. 360.29(c). The Bureau 
will furnish the proper application form and instructions.
    (c) A defaced bond and all available fragments of a mutilated bond 
should be submitted to a Federal Reserve Office listed in 
Sec. 360.1(b)(2) or the Bureau of the Public Debt.
    (d) The application must be made by the person or persons 
(including both coowners, if living) authorized under the regulations 
in this part to request payment of the bond. In addition:
    (1) If the bond is in beneficiary form and the owner and 
beneficiary are both living, the application must be made by the owner, 
and the beneficiary may also be required to join in the application to 
protect the interests of the United States.
    (2) If a minor named on a bond as owner, coowner, or beneficiary is 
not of sufficient competency and understanding to request payment, the 
parents or other person authorized to request payment under Sec. 360.63 
will ordinarily be required to join in the application.

[[Page 38055]]

    (e) If the application is approved, relief will be granted either 
by the issuance of a bond bearing the same issue date as the bond for 
which the claim was filed or by the issuance of a remittance in 
payment.


Sec. 360.27  Application for relief; nonreceipt of bond.

    If a bond issued on any transaction is not received, the issuing 
agent must be notified as promptly as possible and given all 
information available about the nonreceipt. An appropriate form and 
instructions will be provided. If the application is approved, relief 
will be granted by the issuance of a bond bearing the same issue date 
as the bond that was not received. Also, relief is authorized for the 
issuance of bonds for which the Secretary has not received payment, in 
order to preserve public confidence in dealing with issuing agents.


Sec. 360.28  Recovery or receipt of bond before or after relief is 
granted.

    (a) If a bond reported lost, stolen, destroyed, or not received, is 
recovered or received before relief is granted, the Bureau of the 
Public Debt, Parkersburg, WV 26106-1328, must be notified promptly.
    (b) A bond for which relief has been granted is the property of the 
United States and, if recovered, must be promptly submitted to the 
Bureau of the Public Debt, Parkersburg, 26106-1328, for cancellation.


Sec. 360.29  Adjudication of claims.

    (a) General. The Bureau of the Public Debt will adjudicate claims 
for lost, stolen or destroyed bonds on the basis of records created and 
regularly maintained in the ordinary course of business.
    (b) Claims filed 10 years after payment. Any claim filed 10 years 
or more after the recorded date of redemption or other retirement will 
be barred.
    (c) Claims filed 10 years after maturity. Any claim filed 10 years 
or more after the maturity of a savings bond will be barred.

Subpart G--General Provisions for Payment


Sec. 360.35  Payment (redemption).

    (a) General. Payment of a Series I savings bond will be made to the 
person or persons entitled under the provisions of the regulations in 
this part, except that the redemption payment will not be delivered to 
addresses in areas with respect to which the Department of the Treasury 
restricts or regulates the delivery of remittances, including checks 
and electronic payments, drawn against funds of the United States. See 
Department of the Treasury Circular No. 655, current revision (31 CFR 
part 211). Payment will be made without regard to any notice of adverse 
claims to a bond and no stoppage or caveat against payment of a bond 
will be entered.
    (b) Mandatory initial holding period. A Series I bond will be paid 
at any time after six months from issue date at the current redemption 
value determined in the manner described in Department of the Treasury 
Circular, Public Debt Series No. 1-98 (31 CFR part 359).


Sec. 360.36  Payment during life of sole owner.

    A savings bond registered in single ownership form (i.e., without a 
coowner or beneficiary) will be paid to the owner during his or her 
lifetime upon surrender with an appropriate request.


Sec. 360.37  Payment during lives of both coowners.

    A savings bond registered in coownership form will be paid to 
either coowner upon surrender with an appropriate request, and upon 
payment (as determined in Sec. 360.43), the other coowner will cease to 
have any interest in the bond. If both coowners request payment, the 
payment will be made in the form, ``John A. Jones AND Mary C. Jones''.


Sec. 360.38  Payment during lifetime of owner of beneficiary bond.

    A savings bond registered in beneficiary form will be paid to the 
registered owner during his or her lifetime upon surrender with an 
appropriate request. Upon payment (as determined in Sec. 360.43) the 
beneficiary will cease to have any interest in the bond.


Sec. 360.39  Surrender for payment.

    (a) Procedure for definitive bonds of Series I presented at 
authorized paying agents. The owner, coowner, or other person entitled 
to payment of a definitive Series I bond may present the bond to an 
authorized paying agent for redemption. The presenter must establish 
his or her identity and entitlement to payment in accordance with 
Treasury instructions and identification guidelines. The presenter must 
sign the request for payment on the bond or, if authorized, on a 
separate detached request, and add his or her address. If the request 
for payment has been signed, or signed and certified, before 
presentation of the bond, the paying agent must be satisfied that the 
person presenting the bond for payment is the owner, coowner, or other 
person entitled to payment, and may require the person to sign the 
request for payment again. If the bond is in order for payment, the 
paying agent will make payment at the current redemption value without 
charge to the presenter. Paying agents are not authorized to process 
any case involving partial redemption.
    (b) Procedure for all other cases. In the case of definitive bonds 
to which the procedure in paragraph (a) of this section, does not 
apply, or if otherwise preferred, the owner or coowner, or other person 
entitled to payment should establish his or her identity to the 
satisfaction of an officer authorized by the regulations in this part 
to certify requests for payment, sign the requests for payment, and 
provide delivery information for the payment. The bonds must be 
forwarded to a designated Federal Reserve Bank or Branch or the Bureau 
of the Public Debt. Usually, payment will be expedited by submission to 
a designated Federal Reserve Bank or Branch. In all cases, the cost and 
risk of presentation of a bond will be borne by the owner. Payment will 
be made to the registered owner or other person entitled and will be 
delivered according to the instructions of the owner or the other 
person entitled and the regulations in this part.
    (c) Date of request. Requests executed more than six months before 
the date of receipt of a bond for payment will not be accepted. Neither 
will a bond be accepted if payment is requested as of a date more than 
three months in the future.


Sec. 360.40  Special provisions for payment.

    (a) Owner's signature not required. A bond may be paid by a paying 
agent or a designated Federal Reserve Bank or Branch without the 
owner's signature to the request for payment if the bond bears the 
special endorsement of a paying agent specifically qualified to place 
such an endorsement on savings bonds.
    (b) Signature by mark. A signature by mark (X) must be witnessed by 
at least one disinterested person and a certifying officer. See subpart 
I of this part. The witness must attest to the signature by mark 
substantially as follows: ``Witness to signature by mark'', followed by 
his or her signature and address.
    (c) Name change. If the name of the owner, coowner, or other person 
entitled to payment, as it appears in the registration or in any 
related evidence or documents has been changed in any legal manner, the 
signature to the request for payment must show both names and the 
manner in which the change was made; for example, ``Mary

[[Page 38056]]

T. Jones Smith (Mary T. J. Smith or Mary T. Smith) changed by marriage 
from Mary T. Jones'', or ``John R. Young, changed by order of court 
from Hans R. Jung''. See Sec. 360.50.
    (d) Attorneys-in-fact. A request for payment executed by an 
attorney-in-fact on behalf of the bond owner or other person entitled 
to payment of the bond will be recognized if it is accompanied by a 
copy of the power of attorney which meets the following requirements:
    (1) The power of attorney must bear the grantor's signature, 
properly certified or notarized, in accordance with applicable State 
law;
    (2) The power of attorney must grant, by its terms, authority for 
the attorney-in-fact to sell or redeem the grantor's securities, sell 
his or her personal property, or otherwise contain similar authority; 
and
    (3) In the case of a grantor who has become incapacitated, the 
power of attorney must conform with pertinent provisions of State law 
concerning its durability. Generally, in such circumstances, the power 
of attorney should provide that the authority granted will not be 
affected by the subsequent incompetence or incapacity of the grantor. 
Medical evidence or other proof of the grantor's condition may be 
required in any case.


Sec. 360.41  Partial redemption.

    A bond may be redeemed in part at current redemption value, but 
only in amounts corresponding to authorized denominations, upon 
surrender of the bond to a designated Federal Reserve Bank or Branch or 
to the Bureau of the Public Debt in accordance with Sec. 360.39(b). In 
any case in which partial redemption is requested, the phrase ``to the 
extent of $ ______ (face amount) and reissue of the remainder'' should 
be added to the request. Upon partial redemption of the bond, the 
remainder will be reissued as of the original issue date, as provided 
in subpart H of this part.


Sec. 360.42  Nonreceipt or loss of remittance issued in payment.

    If a remittance in payment of the redemption value of a bond 
surrendered for redemption is not received within a reasonable time or 
is lost after receipt, notice should be given to the same agency to 
which the bond was surrendered for payment. The notice should give the 
date the bond was surrendered for payment and describe the bond by 
series, denomination, serial number, and registration, including the 
taxpayer identifying number of the owner.


Sec. 360.43  Effective date of request for payment.

    The Department of the Treasury will treat the receipt of a bond 
with an appropriate request for payment by:
    (a) A Federal Reserve Bank or Branch;
    (b) The Bureau of the Public Debt; or
    (c) A paying agent authorized to pay that bond, as the date upon 
which the rights of the parties are fixed for the purpose of payment.


Sec. 360.44  Withdrawal of request for payment.

    (a) Withdrawal by owner or coowner. An owner or coowner, who has 
surrendered a bond to a Federal Reserve Bank or Branch or to the Bureau 
of the Public Debt or to an authorized paying agent with an appropriate 
request for payment, may withdraw the request if notice of intent to 
withdraw is received by the same agency prior to payment.
    (b) Withdrawal on behalf of deceased owner or incompetent. A 
request for payment may be withdrawn under the same conditions as in 
paragraph (a) of this section by the executor or administrator of the 
estate of a deceased owner or by the person or persons who could have 
been entitled to the bond under Subpart K of this part, or by the legal 
representative of the estate of a person under legal disability, unless 
surrender of the bond for payment has eliminated the interest of a 
surviving coowner or beneficiary. See Sec. 360.70(b) and (c).

Subpart H--Reissue and Denominational Exchange


Sec. 360.45  General

    Reissue of a bond may be made only under the conditions specified 
in these regulations, and only at: A designated Federal Reserve Bank or 
Branch, or the Bureau of the Public Debt. Reissue will not be made if 
the request is received less than one full calendar month before the 
maturity date of a bond. See 31 CFR part 359. The request, however, 
will be effective to establish ownership as though the requested 
reissue had been made.


Sec. 360.46  Effective date of request for reissue.

    The Department of the Treasury will treat the receipt by: A Federal 
Reserve Bank or Branch, or the Bureau of the Public Debt of a bond and 
an acceptable request for reissue as determining the date upon which 
the rights of the parties are fixed for the purpose of reissue. For 
example, if the owner or either coowner of a bond dies after the bond 
has been surrendered for reissue, the bond will be regarded as having 
been reissued in the decedent's lifetime.


Sec. 360.47  Authorized reissue; during lifetime.

    A bond belonging to a living individual may be reissued in any form 
of registration authorized by the regulations in this part upon an 
appropriate request under the conditions and for the purposes outlined 
in this section.
    (a) Single ownership. A bond registered in single ownership form 
may be reissued:
    (1) To add a coowner or beneficiary; or
    (2) To name a new owner, with or without a coowner or beneficiary 
as requested by the new owner, but only if the previous owner and the 
new owner are parties to a divorce or annulment; or
    (3) To name as new sole owner the personal trust estate created by 
the previous owner or which designates as beneficiary the previous 
owner.
    (b) Coownership. During the lifetime of both coowners:
    (1) A coownership bond may be reissued to name a new owner, with or 
without a coowner or beneficiary as requested by the new owner, but 
only if at least one of the coowners and the new owner are parties to a 
divorce or annulment, but reissue is limited to the extent of that 
coowner's interest in the bond (See Sec. 360.22(a)); or
    (2) To name as new sole owner the personal trust estate created by 
at least one of the coowners or which designates as beneficiary at 
least one of the coowners.
    (c) Beneficiary. A bond registered in beneficiary form may be 
reissued:
    (1) To substitute another individual as beneficiary; or
    (2) To eliminate the beneficiary, and, if the beneficiary is 
eliminated, to effect any of the reissues authorized by paragraph (a) 
of this section.


Sec. 360.48  Restrictions on reissue; denominational exchange.

    Reissue is not permitted solely to change denominations.


Sec. 360.49  Correction of errors.

    A bond may be reissued to correct an error in registration upon 
appropriate request supported by satisfactory proof of the error.


Sec. 360.50  Change of name.

    An owner, coowner, or beneficiary whose name is changed by 
marriage, divorce, annulment, order of court, or in any other legal 
manner after the issue of the bond should submit the bond with a 
request for reissue to substitute the new name for the name inscribed 
on the bond. Documentary evidence may be required in any appropriate 
case.

[[Page 38057]]

Sec. 360.51  Requests for reissue.

    Subject to the conditions set out in this subpart, a request for 
reissue of bonds in coownership form must be signed by both coowners, 
except that a request solely to eliminate the name of one coowner may 
be signed by that coowner only. A bond registered in beneficiary form 
may be reissued upon the request of the owner, without the consent of 
the beneficiary. Public Debt forms are available for requesting 
reissue.

Subpart I--Certifying Officers


Sec. 360.55  Individuals authorized to certify.

    The following individuals are authorized to act as certifying 
officers for the purpose of certifying a request for payment, reissue, 
or a signature to a Public Debt form:
    (a) Officers generally authorized--(1) Banks, trust companies, and 
member organizations of the Federal Home Loan Bank System. (i) Any 
officer of a bank incorporated in the United States, the territories or 
possessions of the United States, or the Commonwealth of Puerto Rico.
    (ii) Any officer of a trust company incorporated in the United 
States, the territories or possessions of the United States, or the 
Commonwealth of Puerto Rico.
    (iii) Any officer of an organization that is a member of the 
Federal Home Loan Bank System. This includes Federal savings and loan 
associations.
    (iv) Any officer of a foreign branch or domestic branch of an 
institution indicated in paragraphs (a)(1)(i) through (iii) of this 
section.
    (v) Any officer of a Federal Reserve Bank, a Federal Land Bank, or 
a Federal Home Loan Bank.
    (vi) Any employee of an institution in paragraphs (a)(1)(i) through 
(v) of this section, who is expressly authorized to certify by the 
institution.
    (2) Credit unions. Any officer or employee of a credit union, who 
is expressly authorized to certify by the institution. Certification by 
these officers or designated employees must be authenticated by a 
legible imprint of either the corporate seal of the institution or of 
the issuing or paying agent's stamp. The employee expressly authorized 
to certify by an institution must sign his or her name over the title 
``Designated Employee''.
    (3) Issuing and paying agents. Any officer or expressly authorized 
employee of an organization that is not included in paragraphs 
(a)(1)(i) through (v) of this section but is qualified as an issuing or 
paying agent for savings bonds of Series E, EE, or I. The agent's stamp 
must be imprinted in the certification.
    (4) By United States officials. Any judge, clerk, or deputy clerk 
of a United States court, including United States courts for the 
territories and possessions of the United States and the Commonwealth 
of Puerto Rico; any United States Commissioner, United States Attorney, 
or United States Collector of Customs, including their deputies; in the 
Internal Revenue Service, any Regional Commissioner, District Director, 
Service Center Director, or Internal Revenue agent.
    (b) Officers with limited authority--(1) In the Armed Forces. Any 
commissioned officer or warrant officer of the Armed Forces of the 
United States, but only for members of the respective services, their 
families, and civilian employees at posts, bases, or stations. The 
certifying officer must indicate his or her rank and state that the 
individual signing the request is one of the class whose request the 
certifying officer is authorized to certify.
    (2) Veterans Administration, Federal penal institutions, and United 
States Public Health Service hospitals. Any officer in charge of a 
home, hospital or other facility of the Veterans Administration, but 
only for the patients, or employees of the facility; any officer of a 
Federal penal institution or a United States Public Health Service 
hospital expressly authorized to certify by the Secretary of the 
Treasury or his designee, but only for the inmates, patients or 
employees of the institution involved. Officers of Veterans 
Administration facilities, Federal penal institutions, and Public 
Health Service hospitals must use the stamp or seal of the particular 
institution or service.
    (c) Authorized officers in foreign countries. Any United States 
diplomatic or consular representative, or the officer of a foreign 
branch of a bank or trust company incorporated in the United States 
whose signature is attested by an imprint of the corporate seal or is 
certified to the Department of the Treasury. If none of these 
individuals is available, a notary public or other officer authorized 
to administer oaths may certify, but, if not in a country that is a 
party to the Hague Convention, his or her official character and 
jurisdiction must be certified by a United States diplomatic or 
consular officer under seal of his or her office.
    (d) Authorized officers in particular localities. The Governor and 
the Treasurer of Puerto Rico; the Governor and the Commissioner of 
Finance of the Virgin Islands; the Governor and the Director of Finance 
of Guam; or the Governor and the Director of Administrative Services of 
American Samoa.
    (e) Special provisions. If no certifying officer is readily 
accessible, the Commissioner of the Public Debt, Deputy Commissioner, 
any Assistant Commissioner, or other designated official of the Bureau 
or of a Federal Reserve Bank or Branch is authorized to make special 
provision for any particular case.


Sec. 360.56  General instructions and liability.

    (a) The certifying officer must:
    (1) Require the person presenting a bond, or an appropriate Public 
Debt transaction form, to establish his or her identity in accordance 
with Department of the Treasury instructions and identification 
guidelines;
    (2) Place a notation on the back of the bond or on the appropriate 
Public Debt transaction form, or in a separate record, showing exactly 
how identification was established; and
    (3) Affix, as part of the certification, his or her official 
signature, title, seal or issuing or paying agent's stamp, address, and 
the date of execution.
    (b) The certifying officer and, if such person is an officer or an 
employee of an organization, the organization will be held fully 
responsible for the adequacy of the identification.
    (c) A signature guaranteed stamp under the Securities Transfer 
Agents Medallion Program (STAMP) is an acceptable official seal.


Sec. 360.57  When a certifying officer may not certify.

    Certifying officers may not certify the requests for payment or 
reissue of bonds, or appropriate Public Debt transaction forms if, in 
their own right or in a representative capacity, they:
    (a) Have an interest in the bonds; or
    (b) Will, by virtue of the requests being certified, acquire an 
interest in the bonds.


Sec. 360.58  Forms to be certified.

    When required in the instructions on a Public Debt transaction 
form, the form must be signed before an authorized certifying officer.

Subpart J--Minors, Incompetents, Aged Persons, Absentees, et al.


Sec. 360.60  Payment to representative of an estate.

    (a) The representative of an estate of an owner who is a minor, an 
aged person, incompetent, absentee, et al., may receive payment upon 
request:
    (1) If the registration shows the name and capacity of the 
representative;
    (2) If the registration shows the capacity but not the name of the

[[Page 38058]]

representative and the request is accompanied by appropriate evidence; 
or
    (3) If the registration includes neither the name of the 
representative nor his or her capacity but the request is accompanied 
by appropriate evidence.
    (b) (1) Appropriate evidence for paragraphs (a) (2) and (3) of this 
section includes Public Debt Forms 5385 (redemption) and 5386 (reissue) 
completed and signed by the representative in accordance with the 
proper form's instructions, which are incorporated herein, or a 
certified copy of the letters of appointment or, if the representative 
is not appointed by a court, other proof of qualification.
    (2) Except in the case of corporate fiduciaries, the evidence must 
show that the appointment is in full force and be dated not more than 
one year prior to the presentation of the bond for payment. The request 
for payment appearing on the back of a bond must be signed by the 
representative as such, for example, ``John S. Jones, guardian 
(committee) of the estate of Henry W. Smith, a minor (an 
incompetent)''.


Sec. 360.61  Payment after death.

    After the death of the ward, and at any time prior to the 
representative's discharge, the representative of the estate will be 
entitled to obtain payment of a bond to which the ward was solely 
entitled.


Sec. 360.62  Payment to minor.

    If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of the 
minor's estate, payment will be made to the minor upon his or her 
request, provided the minor is of sufficient competency to sign the 
request for payment and to understand the nature of the transaction. In 
general, the fact that the request for payment has been signed by a 
minor and certified will be accepted as sufficient proof of competency 
and understanding.


Sec. 360.63  Payment to a parent or other person on behalf of a minor.

    (a) If the owner of a savings bond is a minor and the form of 
registration does not indicate that there is a representative of his or 
her estate, and if the minor is not of sufficient competency to sign 
the request for payment and to understand the nature of the 
transaction, payment will be made to either parent with whom the minor 
resides or to whom legal custody has been granted. If the minor does 
not reside with either parent, payment will be made to the person who 
furnishes the chief support for the minor.
    (b) The request must appear on the back of the bond in one of the 
following forms:
    (1) Request by parent:

    I certify that I am the mother of John C. Jones (with whom he 
resides) (to whom legal custody has been granted). He is ____ years 
of age and is not of sufficient understanding to make this request.

Mary Jones on behalf of John C. Jones

    (2) Request by other person:

    I certify that John C. Jones does not reside with either parent 
and that I furnish his chief support. He is ____ years of age and is 
not of sufficient understanding to make this request.

Alice Brown, grandmother, on behalf of John C. Jones


Sec. 360.64  Payment or reinvestment--voluntary guardian of an 
incapacitated person.

    (a) Payment of bonds. (1) When an adult owner of bonds is incapable 
of requesting payment as a result of incapacity and there is no other 
person legally qualified to do so, the relative, or other person, 
responsible for the owner's care and support may submit an application 
for recognition as voluntary guardian for the purpose of redeeming the 
owner's bonds, if the total redemption value of all of the owner's 
bonds does not exceed $20,000. The bonds and application should be 
submitted to a designated Federal Reserve Bank or the Bureau of the 
Public Debt.
    (2) The redemption value of the bonds shall be determined as of the 
date the bonds are received, accompanied by an appropriate request for 
payment. If the total redemption value exceeds $20,000, a legal 
representative must be appointed, as set forth in Sec. 360.60.
    (b) Reinvestment of bonds. (1) If the bonds have matured and ceased 
earning interest, they may be redeemed and the proceeds reinvested in 
any other savings bonds available. The new bonds must be registered in 
the name of the incapacitated person, followed by words showing that he 
or she is under voluntary guardianship; for example, ``John Jones 123-
45-6789, under voluntary guardianship''. A living coowner or 
beneficiary named on the matured bonds must be designated on the new 
bonds, unless such person furnishes a certified statement consenting to 
omission of his or her name.
    (2) If an amount insufficient to purchase an additional bond of any 
authorized denomination of savings bond remains after the reinvestment, 
the voluntary guardian may furnish additional funds sufficient to 
purchase another savings bond of the lowest available denomination. If 
additional funds are not furnished, the remaining amount will be paid 
to the voluntary guardian for the use and benefit of the incapacitated 
person.


Sec. 360.65  Reissue.

    A bond on which a minor or other person under legal disability is 
named as the owner or coowner, or in which he or she has an interest, 
may be reissued under the following conditions, but only in accordance 
with subpart H of this part:
    (a) A minor for whose estate no representative has been appointed 
may request reissue if the minor is of sufficient competency to sign 
his or her name to the request and to understand the nature of the 
transaction.
    (b) Except to the extent provided in paragraph (a) of this section, 
reissue will be restricted to a form of registration which does not 
adversely affect the existing ownership or interest of a minor or other 
person under legal disability. Requests for reissue should be executed 
by the person authorized to request payment under Secs. 360.60 and 
360.63, or the person who may request recognition as voluntary guardian 
under Sec. 360.64.

Subpart K--Deceased Owner, Coowner or Beneficiary


Sec. 360.70  General rules governing entitlement.

    The rules in this section govern ownership or entitlement where one 
or both of the persons named on a bond have died without the bond 
having been surrendered for payment or reissue. Proof of death may be 
in the form of a properly completed Public Debt Form or death 
certificate, or other evidence as required by the Bureau of the Public 
Debt.
    (a) Single owner bond. If the owner of a bond registered in single 
ownership form has died, the bond becomes the property of that 
decedent's estate, and payment or reissue will be made as provided in 
this subpart.
    (b) Coowner bond--(1) One coowner deceased. If one of the coowners 
named on a bond has died, the surviving coowner will be recognized as 
the sole and absolute owner, and payment or reissue will be made as 
though the bond were registered in the name of the survivor alone. Any 
request for reissue by the surviving coowner must be supported by proof 
of death of the other coowner.
    (2) Both coowners deceased. If both coowners named on a bond have 
died, the bond becomes the property of the estate of the coowner who 
died last, and

[[Page 38059]]

payment or reissue will be made as if the bond were registered in the 
name of the last deceased coowner alone. Proof of death of both 
coowners will be required to establish the order of death.
    (3) Simultaneous death of both coowners. If both coowners die under 
conditions where it cannot be established, either by presumption of law 
or otherwise, which coowner died first, the bond becomes the property 
of the estates of both equally, and payment or reissue will be made 
accordingly.
    (c) Beneficiary bond--(1) Owner deceased. If the owner of a bond 
registered in beneficiary form has died and is survived by the 
beneficiary, upon proof of death of the owner, the beneficiary will be 
recognized as the sole and absolute owner of the bond. Payment or 
reissue will be made as though the bond were registered in the 
survivor's name alone. A request for payment or reissue by the 
beneficiary must be supported by proof of death of the owner.
    (2) Beneficiary deceased. If the beneficiary's death occurs before, 
or simultaneously with, that of the registered owner, payment or 
reissue will be made as though the bond were registered in the owner's 
name alone. Proof of death of the owner and beneficiary is required to 
establish the order of death.
    (d) Nonresident aliens. If the person who becomes entitled to a 
bond because of the death of an owner is an alien who is a resident of 
an area with respect to which the Department of the Treasury restricts 
or regulates the delivery of remittances, including checks and 
electronic payments, drawn against funds of the United States or its 
agencies or instrumentalities, delivery of the redemption payment will 
not be made so long as the restriction applies. See Department of the 
Treasury Circular No. 655, current revision (31 CFR part 211).


Sec. 360.71  Estate administered.

    (a) During administration. The court-appointed or otherwise legally 
qualified representative of an estate may request payment of bonds, 
including any bond redemption proceeds, that are the property of the 
estate or may have the bonds reissued in the names of persons entitled 
to share in the estate. The representative should use the procedure and 
Public Debt Form referred to in Sec. 360.72 to request payment or 
reissue. The representative's request may instead be supported by 
evidence of authority in the form of a court certificate or a certified 
copy of the representative's letters of appointment which must be dated 
within six months of the date of presentation of the bond, unless the 
evidence shows that the appointment was made within one year prior to 
presentation of the bond.
    (b) After administration. If the decedent's estate has been settled 
through judicial proceedings, bonds, including any bond redemption 
proceeds, that are the estate's property, will be paid, or the bonds 
will be reissued, upon the request of persons entitled. Persons 
entitled should use the procedure and the Public Debt Form referred to 
in Sec. 360.72 to request payment or reissue. A request by persons 
entitled may be supported by a certified copy of the court-approved 
final account for the estate, the court's decree of distribution, or 
other pertinent court records.


Sec. 360.72  Procedures for the payment or reissue of bonds that are 
property belonging to a decedent's estate.

    (a) If bonds are the property of the estate of a decedent in 
accordance with Sec. 360.70, the bonds and any redemption proceeds 
shall be paid, or the bonds shall be reissued, in accordance with the 
rules in this part, pursuant to an appropriate request.
    (b) Bonds shall be reissued or proceeds distributed in the 
following order of precedence:
    (1) To the court-appointed or otherwise legally qualified 
representative of the last deceased bond registrant's estate;
    (2) To the persons entitled after the estate of the last deceased 
bond registrant has been settled, and the court has discharged the 
representative;
    (3) To the persons entitled to share in the estate of the last 
deceased bond registrant's estate in accordance with State law relating 
to summary settlement of decedents' estates or settlement of small 
estates of decedents when no representative has been appointed by the 
court and none is to be appointed;
    (4) To the surviving spouse if no representative has been appointed 
by the court, none is to be appointed, and there is no surviving child 
or descendant of a deceased child of the decedent;
    (5) To the surviving spouse to the extent of one-half and the child 
or children of the decedent, and the descendants of deceased children 
by representation, to the extent of one-half if there are both a 
surviving spouse and a child, children, or descendants of deceased 
children, no representative has been appointed by the court, and none 
is to be appointed, or by the agreement of all the persons entitled in 
this class;
    (6) To the child or children of the decedent, and the descendants 
of deceased children by representation, if there is no surviving 
spouse, no representative has been appointed by the court, and none is 
to be appointed;
    (7) To the parents if none of the above;
    (8) To the brothers and sisters and descendants of deceased 
brothers and sisters by representation if none of the above;
    (9) To other next-of-kin as determined by the laws of the domicile 
at the time of death if none of the above;
    (10) To persons related to the decedent by marriage, i.e., heirs of 
a spouse of the last deceased registrant where such spouse predeceased 
that registrant, if none of the above;
    (11) To the person who paid the burial and funeral expenses, or a 
creditor of the decedent's estate, but payment may be made only to the 
extent and to the proportion the person has not been reimbursed, and 
reissue will not be permitted, if none of the above;
    (12) Escheat.
    (c) Payments made pursuant to this section shall be made as set out 
in paragraph (b) of this section either to a person individually, or 
individually and for the account of other persons entitled of the same 
class. A person receiving payment of bond proceeds individually and for 
the account of other persons shall agree, and be obligated, to make 
fair and proper distribution of such proceeds to such other persons. 
The provisions of this section are for the convenience of the 
Department of the Treasury and do not purport to determine ownership of 
the bonds or of their proceeds. The Department of the Treasury, Bureau 
of the Public Debt, Federal Reserve Banks, and any authorized paying 
agents may rely on the information provided by the person who requests 
payment or reissue, and shall not be liable for any action taken as set 
out in this section, in accordance with the information so furnished.

Subpart L--Fiduciaries


Sec. 360.75  Payment or reissue during the existence of the fiduciary 
estate.

    (a) Request from the fiduciaries named in the registration. A 
request for reissue or payment signed by at least one, but less than 
all, of the fiduciaries named in the registration shall be deemed 
sufficient and acceptable proof that less than all of the fiduciaries 
may properly execute the request. If the fiduciaries named in the 
registration are still acting, no further evidence will be required. In 
other cases, i.e., cases in which the fiduciary is not designated by

[[Page 38060]]

name and title in the bond registration or a fiduciary designated in 
the bond registration is no longer acting, the request must be made in 
accordance with Subparts J and K of this part.
    (b) Corporate fiduciaries. If a bond is registered in the name of a 
public or private corporation, such as a financial institution, or a 
governmental body as fiduciary, the request must be signed by an 
authorized officer in the name of the organization as fiduciary. 
Ordinarily, a signed and certified request will be accepted without 
further evidence.
    (c) Trustee of a common trust fund. A bond held by a financial 
institution as a trustee may be reissued in the name of the institution 
as trustee of its common trust fund to the extent that participation in 
the common trust fund is authorized by law or regulation. The request 
for reissue should be executed by the institution and any co-trustee.
    (d) Successor fiduciary. If the fiduciary in whose name the bond is 
registered has been replaced by another fiduciary, a properly executed 
form or satisfactory evidence of successorship should be furnished.


Sec. 360.76  Payment or reissue after termination of the fiduciary 
estate.

    A bond registered in the name or title of a fiduciary may be paid 
or reissued to the person who has become entitled by reason of the 
termination of an estate, other than a decedent's estate (see Subpart K 
of this part). Requests for reissue made by a fiduciary pursuant to the 
termination of a fiduciary estate should be made on the appropriate 
form. Requests for payment or reissue by other than the fiduciary must 
be accompanied by evidence to show that the person has become entitled 
in accordance with applicable State law or otherwise. When two or more 
persons have become entitled, the request for payment or reissue must 
be signed by each of them.

Subpart M--Miscellaneous Provisions


Sec. 360.90  Waiver of regulations.

    The Commissioner of the Public Debt, as designee of the Secretary 
of the Treasury, may waive or modify any provision or provisions of the 
regulations in this part. He or she may do so in any particular case or 
class of cases for the convenience of the United States or in order to 
relieve any person or persons of unnecessary hardship:
    (a) If such action would not be inconsistent with law or equity;
    (b) If it does not impair any material existing rights; and
    (c) If he or she is satisfied that such action would not subject 
the United States to any substantial expense or liability.


Sec. 360.91  Additional requirements; bond of indemnity.

    The Commissioner of the Public Debt, as designee of the Secretary 
of the Treasury, may require:
    (a) Such additional evidence as he or she may consider necessary or 
advisable; or
    (b) A bond of indemnity, with or without surety, in any case in 
which he or she may consider such a bond necessary for the protection 
of the interests of the United States.


Sec. 360.92  Supplements, amendments, or revisions.

    The Secretary of the Treasury may at any time, or from time to 
time, prescribe additional, supplemental, amendatory, or revised rules 
and regulations governing United States Savings Bonds.

[FR Doc. 98-18621 Filed 7-8-98; 4:13 pm]
BILLING CODE 4810-39-P`